The new year brings fresh starts and fresh attitudes. We often make resolutions and set goals that we quickly give up or realize are unfeasible (going to the gym 5 days a week.., all kale diet…). But there’s one resolution that we can help you keep- prepping yourself to buy a home. With just a little commitment and one of our excellent Palisade Realty Agents you’ll be on your way to home-ownership in no time.
Understand the true cost of home-ownership
It’s not just a mortgage you’ll be paying; you need to be aware of other costs. One term you’ll hear often is PITI, which stands for principal, interest, taxes and insurance. Some homes will also have homeowners association fees, Mello-Roos or supplemental taxes. It’s important to have a knowledgeable and trustworthy Realtor to help you identify which properties may have these extra costs. It’s also important to have reserves set aside for repairs or improvements.
Create a tangible budget
There’s an amount we can be qualified for, an amount we’d actually like to spend, and an amount that is current market value. With the help of your agent look at all the variables: location, amenities/features, age of the property, extra costs, etc. Focus on properties where the current market value is closest to what you feel comfortable spending per month. Don’t be afraid to ask your lender what different loan programs they offer. You may find that you qualify for a lower cost loan product and that can significantly improve your budget.
Start preparing your finances
Your credit score and spending habits will be closely looked at when applying for a mortgage. Keep spending to a minimum, pay down debts and try to eliminate any unnecessary credit cards. Do you have enough liquid assets to pay for closing costs in addition to your down payment? You’ll want to put your best financial foot forward!
This is also the time to start thinking about what additional expenditures home ownership will bring. Will you need a gardener, chimney sweep, or pool cleaner? What about appliances or additional furniture? Set those amounts aside as reserves so you know you’ll be financially ready to enjoy your new home.
Find a Real Estate Professional you can trust
Not every real estate agent is created equally and finding someone you enjoy working with is extremely important. Interview a few agents and don’t be afraid to ask questions. Some ideas to get you started:
- What services do you offer?
- What level of communication should I expect from you?
- Do you work with a team?
- Do you have a list of recommended vendors?
- Have you worked with a buyer similar to me before?
- Are you a full time or a part time agent?
Also, ask questions about the areas you’re interested in and pay close attention to the answers; you want to find an agent that truly knows about the area or is more than willing to research and learn.
Getting pre-approved for a loan will be your next big step as you move into the house hunting phase. Pre-approval is your ticket to seeing homes in your price point and being able to submit strong offers. You’ll need to gather your financial information to submit to your lender including tax returns and bank statements, without these items lenders won’t be able to approve you. Ask your agent if they have a lender recommendation, working with a lender that has a great relationship with your agent typically makes the process smoother.
Head out and house hunt
This process is unique for everyone, some buyers find a home on the first day and some can take considerably longer. If you have feedback (good or bad) share your thoughts with your agent so they can continue to refine your search. Once you’ve found the “one” it’ll be time to write an offer.
You may not be quite ready to start the home buying process but our agents are always ready to help, even if you’re at the very beginning stages. A knowledgeable professional will go a long way to helping you keep you resolution!
Start your search today or call us- 619-794-0218