As a recent, first-time homebuyer, I’m confident in saying it’s never too early to start preparing to become a homeowner.
I thought I was well prepared when I purchased my home, particularly since I was set financially. I was comfortable with my forecasted monthly payment and embarked on this new journey with confidence.
But as the process continued, there were so many unexpected expenses that popped up along the way. Thankfully, in the end, I made it through just fine.
As I reflect on this experience, I thought it might be helpful to share with others the tips I learned along the way on my homebuying journey. I also would like to share a few additional tips you can start to use now, as you look toward the possibility of becoming a future homebuyer.
Below are a few tips for you to consider as you contemplate your first homebuying experience:
Tip #1: Check your credit
Your credit score affects many aspects of your life, including interest rates on large purchases including, but not limited to, mortgages. Your score also is closely intertwined with your ability to obtain other small loans.
Make sure you check your credit report annually. You can do so for free by visiting www.annualcreditreport.com. Also watch for unauthorized accounts, loans and purchases. This is a signal your identity might have been stolen, and it will damage your credit rating.
If you find inaccuracies in your report, you can dispute those errors online, by mail or over the phone by contacting the credit bureau where you found the inaccurate report. You will be able to find the contact information within the confines of the report itself.
Checking your credit report regularly also helps you gauge your status before you apply for a home loan.
Tip #2: Don’t stop saving once you’ve reached your down payment amount
I highly encourage my customers to think well beyond a down payment. In a hot market such as the one we’re in now, many sellers are asking that buyers pay for closing costs. While this might not be the case in every situation, you do want to be prepared to pay closing cost fees.
In addition to closing costs, you will also be responsible for paying for an inspection, if requested.
The other cost aspect you should take into account when buying a home is the property type. Are you moving into a fixer-upper or a move-in-ready home? Each home will have its own unique set of expenses, depending on the property’s condition.
Last but not least, I always tell my customers to prepare for moving day. Moving day in itself can be pricy, depending on how much work you plan to do on your own. A few examples of additional costs on moving day are securing a moving truck and hiring a moving company.
Other related expenses to keep in mind: changing locks on your doors, cleaning supplies, installation for cable or Internet and, of course, any updates you make to the home. Every loan and home will be different, but being financially prepared will make a world of a difference as you travel through your own unique homebuying experience.
Tip #3: Choosing the right financial partner
Since most lenders offer similar interest rates and flexible down payment options, it important to consider other factors like “How much are closing costs?” and “Is there a real person I can talk to if I have questions?” At Community State Bank we have local lenders, and local servicing, which means there is always someone available to answer your lending questions.
Tip #4: Talk to your lender before you start shopping
A good way to see if you are financially capable of buying a home is to consult with a lender. Community State Bank offers an online application to begin that process. This is an important part of the process, as it tells others involved in the would-be transaction you have a strong likelihood of qualifying for a loan.
Tip 5: Think about the future when shopping
Make sure you are looking at homes that work for you, and this plays out in a number of scenarios, including raising a family, moving away from your parents, finding a starter home or finding your forever home.
When you go through the homebuying process, you want to find a property that will be tailored to your needs. If you plan on raising a family, for example, make sure you look at the school district the property is within.
Other considerations: If you are not comfortable making repairs, find a home with limited cosmetic defects. Conversely, if you are comfortable with home improvement, consider a property in need of minor repairs to help stay within your budget.
Keep your future goals and self in mind with every walk through, open house and search you do. Making a list of must-haves could be beneficial during your house hunt.
If you’re ready to begin the homebuying process, or simply looking for additional information, I’d be happy to chat and discuss the next steps. Please give me a call at 262-864-2349, or visit us online at communitystatebank.net.