Getting the keys to your own property is an exciting experience for us all, whether it’s your first home or your fifth. However, before you start thinking about paint colors and long-term renovation projects, you need to get prepared for the whole property purchase experience.
Whether or not you have bought home before, there are certain tasks you need to carry out. Make sure you know what you may need to do next and check that these items are on your to-do list.
Find out your credit score
This will be one of the biggest factors on what your loan terms may be. Figure out what it is and, if it’s below 700, then take the time you need to improve it. A good score means you will get a low-interest rate, which could therefore save you many thousands of dollars over the length of the loan.
Be aware of every expense
As well as your mortgage, there will be plenty of other fees that you’ll have to consider when buying a home. These can include insurance, taxes, and repairs, among others, so you should budget to cover these costs if they are required for the purchase.
Look for a lender
Getting pre-approval for a mortgage is an important part of the process, so to get the best deal for you, have a good look around. Aim to get the lowest rate you can for your mortgage, since you’ll be paying for it over a long period; make sure that you also check the annual percentage rate (APR).
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You may also wish to consider checking out hard money lenders. They will offer short-term, secured, non-banking loans for property purchases, developments, or renovations.
Set out a savings plan
Make sure you take the time to reorganize your budget and create a savings plan for costs, including your down payment. If you can make it so that you have a larger down payment, then you can save money on mortgage payments, and therefore you’ll be more attractive to lenders. See if there are any down payment assistance programs available to you, too.
Stop using your credit card
Check you aren’t in credit card debit, which will also help you boost your credit history. Take the steps to stop using your credit card, and think about using a balance-transfer credit card to cut your debt load even quicker. Not only will this improve your credit score, but it will also help you figure out your finances, meaning that it the mortgage payments won’t be so overwhelming.
Define what you want in a home
You should have a clear idea of what you want before you begin looking for your next home as it will be one of the biggest purchases you’ll make. You don’t need to wait for mortgage pre-approval to narrow your options, although this should be done early in the process. Think about the features that you won’t compromise on, and those on which you are willing to compromise. List the style of home you want, the floor plans, the type of neighborhood, and any other important details. This will make it easier to shop around for your new home.