I probably could tell you these steps in my sleep. I have been speaking so much over the last couple of weeks about homebuying, I believe it is worth repeating. These are steps you want to take in this order and even take your time with the first step.
1) Check your Credit Report and Score. You need to know what your credit report says about you. Before you start searching for a house get your credit report. There are some banks that will give you your credit score on your report. Otherwise go to www.annualcreditreport.com and retrieve your report. Credit score will range between 300 to 850. You want your score to be high in order to achieve a lower interest rate.
2) Determine out How Much You can Afford
This is where you want to determine you debt-to-income ratio. You want to make sure you do not have more money going out than coming in. This is where you utilize online mortgage calculators. You are figuring out an affordable monthly mortgage payment based on your situation.
3) Find the Right Lender and Real Estate Agent
I cannot stress enough that you should take your time and shop around. Contact the different Realtor Associations in your area and see who they recommend. They will know who is reputable and who is not. Also watch the different mailers that come in that share who has sold what property in your area. This will also give you some good information. Also talk with your neighbors and colleagues. I would recommend a very similar approach when it comes to finding the right lender. One of the main things you want to make sure happens is that you get a pre-approval through a lender. This is based on actual numbers, where as pre-qualifications is only a guess and not a guarantee.
4) Looking For a Home – Here is a fun task
If you have lived in an apartment, townhouse or condo and are considering purchasing a house, you might already know what you want in a home. Furthermore, begin writing down different items you will need and shop around to get the best cost. Do not begin spending at this time but see who has the best price where. I remember one of the things we looked at when shopping for a house was the cars that were parked at the houses. You will be surprised at what you will learn from this. Usually people take into consideration the types of schools in the neighborhood and the length of commute from home to work. Take your time. You can have fun in this process.
