4 Things You Need to Know Before You Buy
If you are considering buying a home, there are few things you really must know before you start your search. Home shopping can be an exciting time in your life, but it pays to be prepared before you contact a Realtor.
Here are 4 things that are “Good to Know” to make the home buying process go smoothly:
- Know your credit score: Credit reports are kept by the three major credit agencies, Experian, Equifax, and TransUnion. They show whether you are habitually late with payments and whether you have run into serious credit problems in the past. Having a good credit score can determine if you qualify for a mortgage. Errors can occur too. Get a copy of your credit report and look for errors. If you find any, contact the agencies directly to correct them, which can take two or three months to resolve. If the report is accurate but shows past problems, be prepared to explain them to a loan officer.
- Know if you have enough for a down payment and closing costs: Look at your savings to determine a solid amount you have to put towards this new home purchase. Do you have enough for a down payment and to cover fees and closing costs? These may include the appraisal fee, loan fees, attorney's fees, inspection fees, and the cost of a title search. They can easily add up to more than $10,000—and often run to 5% of the mortgage amount. Closing costs can be rolled into certain types of mortgages, but it pays to know exactly what you have available in cash before you sit down with a mortgage lender and your Realtor.
- Know which type of house you really want: Do you prefer a split-level or colonial? Do you want everything on one floor? How much land do you require? Knowing these details ahead helps your Realtor eliminate those homes that fit your budget, but you would have no desire to buy.
- Know what communities you want to live in: Your Realtor will be able to pull up listings for you to consider that fit your needs–3 bedroom, 2 ½ baths, fireplace, etc.–but if the home is too far from work or not in a desirable location, you are probably wasting time having it on the list. Investigate schools, neighborhoods, and what each community has to offer, and come up with specific areas for your search to focus on.
There are many dos and don'ts when it comes to buying a home. You can save time and frustration by knowing these four things before you begin the buying process. Your Realtor and lender will appreciate your preparation, and you will be able to quickly get down to the business of shopping for that new home.
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