It hasn’t always been easy out there for home buyers. But being a buyer on the housing market doesn’t have to be an intimidating situation. Real-estate experts are expecting an influx of house-hunters during the second half of this decade.
If you’re buying a home, you’ll want to make sure you’re making all of the right decisions. But, even if you’ve gone through the process before, it can be difficult to remember the steps involved. Luckily, there are time-tested guidelines for what to do along the way. Here’s what the industry pros recommend:
Pay down your debt.
Credit score is perhaps the most critical single component in purchasing a first home. “Look over your credit report, and make sure there are no mistakes on it,” says Ian Aronovich, co-founder and CEO of GovernmentAuctions.org. “Pay off as much credit card debt as you can at least a month before applying for a mortgage; this will not only give a boost to your credit score but it will also help you qualify under the bank’s debt-to-income ratios.”
Get a pre-approval letter.
“Use an independent mortgage lender to get your preapproval letter,” says Robert Twaron of San Antonio Home Finders. “Oftentimes you can get an approval letter faster and for a higher amount than anything the big banks will want to grant you, and with a better interest rate.”
That’s because independent mortgage lenders aren’t the representatives of giant lending institutions. And they’ve become especially successful in the wake of the housing-market crisis, partly because they’re working directly with the loan’s underwriter, and because their business model includes an incentive for getting your mortgage approved.
Compared to a big bank, the experience of an independent mortgage lender is likely to be a higher-touch scenario — more advice, more assistance offered along the way. A simple online search can help locate independent mortgage lenders.
Hire an agent.
“In most states this is still free for the buyer,” says Darlene Brent, associate broker at Long & Foster Real Estate. Brent adds that an agent often helps buyers scale their goals to homes that can serve them best. “Get someone on your side who is an expert and can help you have realistic expectations,” she says. “Start small so you don’t get in over your head.” Realtor.com and ZipRealty are great places to start when searching for an agent.
Do some research.
“Spend some time in the location; go out to eat at local restaurants; check out the service providers in the area; and, if you need schools for children, do your research,” advises Elizabeth Dodson, co-founder of HomeZada. “Remember to consider your commute to work, the safety of the location, what your interests are, and how close you are to the activities you like to do.”
Hire an inspector.
“Skip the cosmetics, look at the systems,” says Casey Menish of The E4Realty Group. “Too many buyers get caught up in the paint colors and flooring — easy and cheap fixes — rather than checking out the age and condition of the major systems in the house, like the water heater, the HVAC, and the like.”
Get your credit in order.
Finally, when you’re ready to make an offer, it’s time to press pause on any major life changes.“Pay close attention to your use of credit between the time of your loan application and the closing,” says Ron Rovtar, associate broker at Cherry Creek Properties.
“Generally, credit experts suggest you make no unusual purchases, make all credit payments on time, and neither close nor open new accounts while buying your new home. Also, this is not a good time to change jobs or buy a new car. Even using credit to purchase furniture for your new residence could cause a problem at closing.”
With these tips in mind, you’ll will be on your way to buying a new home. If you take the time to prepare, and remain patient throughout the complications of the process, then those new front-door keys will be yours.
If you’re preparing to buy a home, now is a great time to look into homeowners coverage.