When shopping for a home, the "needs" and "wants" vary from buyer to buyer. It is vital to organize and prioritize your beliefs for the purpose of communication with your REALTOR®. Begin by brainstorming a list of requirements for a new home. In this list, identify the "needs" and the "wants"; include aspects that impact the location and neighborhood. What specific areas appeal to you? What else influences your list?
Do not just consider what you are looking for now; also think about it down the road. Refining your interests based on events down the road will mold how you currently look at buying a home.
All things are ready, if our mind be so.
-William Shakespeare, Henry V
Set your budget. If you have not previously created and set a budget, do so immediately. Consider your current payment in rent and what you can afford in a mortgage every month; are these the same? Are you allocating a portion of your income to put toward maintenance and improvements of your home? Will any predictable, planned financial obligations exist down the road, and if so, how will these impact your ability to pay your mortgage? Do current financial obligations exist that will be eliminated in the future? How much will you be able to contribute to savings if you have a mortgage? Challenge yourself to outline your current and future finances before proceeding in the purchase of a home.
Check your credit report. The Federal Credit Reporting Act (FCRA) allows you to receive a free credit report every 12 months to review any inconsistent or inaccurate information that may impact your credit score. You can receive a free credit report from Equifax, Experian, and TransUnion by submitting an online request at www.annualcreditreport.com.
These free reports do not include your credit score; however, they provide you with extensive information which positively and negatively impacts your score. You can dispute any inaccurate information found in a report
For those of us who like apps, Credit Karma is a great app for keeping track of your credit score and transactions that impact your score; simply download it to your phone in the app store.
Get pre-approved. Research and select a lender to receive a pre-approval letter. Many lenders allow you to apply online. You will receive your credit scores when you apply, allowing your lender to determine your financial position in securing a mortgage.
I strongly advise my clients to work with a local lender for a number of important reasons: they have a professional reputation to uphold, they know the local market, and they are invested in building a better community. Now, I have worked with some great lenders from outside the area, but at the end of the day, we need a lender willing to go the extra mile in communication and transparency!
Choose your REALTOR®. You may already have someone in mind, you may be meeting agents through weekend open houses, or you may be searching online via websites; either way, identify three attributes for your desired agent and test these out using personal conversations. Select an agent willing to work for you.
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