Your first steps to buying a home

There’s no question that buying a home – whether it’s your first or fifteenth – is always a big deal. For a while you seem to think of nothing else. You see "For Sale" signs everywhere you look. You spend hours looking through sites on the Internet and through ads in the newspapers.

Before you get carried away with it all, take the time step back and ask yourself some basic questions that can save you a lot of time and headaches.

Are You – and Everyone Involved – Ready to Do This?

Before you start your search for that perfect home, be sure that everyone involved agrees this is a good thing to do.  When one spouse is ready to buy but the other is not, the process can be very difficult for everyone. Buying a home and taking on the obligation of a mortgage has to be right for everyone. If the time is not right for you, wait a bit and come back to it when things have changed. But if everyone is on board, go for it!

Do You Know What You Really Want?

Now that you’ve decided to buy a home, you need to think about what your needs and wants are. What style, size, and location are you looking for? Do you need to buy and move in a certain timeframe, or can you take your time to search for the perfect place? Are schools, access to transportation, or nearby shopping important? Make a list of things you must have, and then a list of things you would like to have. When you select a Realtor® to work with, these lists help the agent find your new home.

Show Me the Money

Most people pay for a home with a combination of cash and a mortgage. You need cash to make a deposit when you sign a contract to buy the house, and a downpayment of anywhere from zero to 20% or more, depending on the type of loan you have for the balance of the purchase. You also need cash for closing costs, though it may be possible to negotiate with the seller to contribute toward those costs.

In the months before you apply for a mortgage it is especially important that you pay all your bills on time. If you carry a balance on your credit card, you should try to pay that down as much as possible. Your credit history, the way you pay your bills, and the amount of debt you have outstanding are all important factors in what kind of mortgage you can get, and what interest rate you will pay. 

Next Article…Next Steps

Now that you have the basics covered, you’re ready to find your dream home. Check back soon for the next article in this series with useful tips for finding and buying your new home.

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