Homebuyers - Set Your Goals Before House Hunting
With so many houses on the market to choose from, you should have no trouble finding the house of your dreams. What you might be asking yourself is how you can streamline your search and make the buying home process easier on yourself. First, reassure yourself that your house is out there, just waiting to be found. Next, take control of your home search by doing some planning. Following a simple step-by-step process will keep you from wasting your time, and bring you that much closer to owning your new home.
Determine Your Budget and Stick To It
The first and most important step when making a list of your qualifications for a house should be the price. Once you know what you can afford, you won't waste time looking at houses that are out of your price range.
To start, consider all of your expenses. Make sure to not leave anything out. Include your typical monthly food budget, the amount you spend on gas to commute to work, etc. Remember that if you move into a larger home, your electric and gas bill could be higher, and plan accordingly. Once you've got a ballpark figure of how much you can afford to pay each month, do some calculating. Search online to find a mortgage calculator. Enter your high-end monthly payment and the interest rate that you expect. The calculator will figure the total home price for you.
Get Pre-Approved for the Right Amount
You don't need to have a house in mind in order to visit your local bank or mortgage broker, and it's a good idea to get pre-approved for a loan before you begin looking. This is a huge bonus to sellers, too, because you can show them your pre-approval letter, and they'll know that you can afford their home. The mortgage professional will likely give you a letter showing the high end price, such as "pre-approved for up to $200,000." Here's a tip to keep in mind: If you fall in love with a house that has a $175,000 price tag, ask your mortgage contact to create a new letter stating that you are pre-approved for $175,000. If the sellers see that you have been approved for $200,000, they might try to push for a higher offer. You always have a right to maintain your privacy!
Pre-Qualified - Is It Good Enough?
When visiting your bank, be aware of the difference between being pre-approved and pre-qualified. If a lender pre-qualifies you for a loan, you are not guaranteed to receive that money. The lender will simply ask you questions such as how much you earn, how much debt you have, your assets, etc., and give you an idea of how much you are likely to be able to borrow. However, at that stage, nothing is verified. Your lender hasn't even run your credit check yet!
Take the steps to get pre-approved, rather than just pre-qualified. This means you will have actually applied for a loan and been approved by the lender. Sellers love to see a pre-approval letter, because it's as good as a check from the bank. In almost every case, once a lender approves you for a loan, they cannot retract that offer. It's certainly worth the paperwork to have that guarantee that you'll be able to afford your dream home!
Time to Get Choosy
It might not be as much fun to deal with the bank first, but you'll be glad that you took the responsible route once you start viewing homes. You'll have the confidence of knowing that you can afford the house you're walking through, and it'll free your mind to focus on the important details. Now that you know your budget, it's list-making time again. Brainstorm with your family about what you need, want, and don't want in a home. Now of course, many homebuyers have been adamant about wanting a ranch, only to fall in love with a two-story Colonial, and you could do the same. However, having a good framework to begin with will help take the stress out of searching.
When you're ready to see actual homes, start scouring your local paper for open houses. Open houses are a good way to begin your home search because they are usually low-pressure events. In most cases, you'll be free to look around the house at your leisure. This is a good way to refine your list of qualifications, too. If you tour a house that is just too small, but it has a great screened porch, jot down a note about how much you liked the porch. Maybe you can find a house with a similar porch that has more square footage. Visiting as many open houses as you can will also give you a chance to check out neighborhoods that you might not have been to before.
Even better yet, use modern technology to your advantage! Search the internet for your new house on sites like sellyourhome.com. Here, you can search for your perfect new home, from the comfort of your old one. Using the internet is particularly useful if you're planning on moving far away, and you're unable to travel to open houses in your new area. It can also be very useful for selling a pre-existing home. National websites like sellyourhome.com can serve all your needs, whether your move is across the street, or across the country! |
