It’s no secret that buying a home is an emotionally taxing and financially burdensome process. A home is one of the biggest purchases you’ll make in your life, which is why it’s essential to be extra careful about the entire process.

Many homebuyers often enter the housing market and get completely infatuated with the first home they see. This can lead to unnecessary disappointments since there is so much you have to be careful about before making the final decision and purchasing a property.

Whether you’ve just begun your home search or are actively looking to buy a home, here is a quick checklist to help you make an informed decision.

 

Find Out What You Can Afford

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The number one thing professional realtors ask homebuyers to do is find out how much they can afford.

There is nothing as disappointing as finding a stunning property that you’re unable to afford. Investing in a home is a huge financial decision, and it needs to be done the right way.

Take a comprehensive look at your personal finances before you begin your house search.

Another thing to remember is to assess your debt. When you’re partnering with a lender, they’ll want to find out if you can handle your existing debts along with your new mortgage payments.

Here are a few steps you can take.

  • Check your installment loans: You should pay off any kind of installment loan to make it much easier to pay the mortgage
  • Check your credit cards: Make sure to pay off your credit card balances so you’re only using 30% of your available credit. A maxed-out credit card can portray you as an irresponsible credit user. This can have an impact on your credit score.
  • Check your student loans: Student loans can also affect your ability to pay a mortgage.

 

Check Your Credit Score

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Remember: the better your credit score is, the lower the interest rate you’ll receive on your home loan. This is why you need to check your credit score before you go house hunting.

Here are some ways experienced realtors recommend to amplify your score.

  • Increase your credit card limit:You have the option to contact your credit card company and put in a request to increase your credit card limit. A high credit card limit will automatically lower your credit utilization rate.
  • Pay credit card debt:The credit score can rise if you have a lower credit utilization rate.
  • Resolve any credit errors:If you find any errors on your credit report, make sure to get them resolved through an appropriate credit bureau dispute process.

 

Planning the Down Payment

Now that you know how much house you can afford, it’s time to figure out how much you need to save for a down payment.

The amount of down payment typically depends on the type of home loan you obtain – it can range from 3.5% to 20%.

Lenders usually prefer working with homebuyers that have a higher down payment. This is because they assume that buyers willing to invest more cash upfront are more reliable.

 

Be Specific About Your Needs

Before you start exploring your options in the housing market, create a wish list. This can be quite fun—sit down with your family and decide on what kind of features you would like to see in your dream home.

For example, would you like a started home, or do you want something more long-term?

Here are a few things you can include in your list.

What’s the ideal location?

Select a neighborhood that has all the safety amenities that you’d like, such as green spaces, coffee shops within walking distance, walkability, etc. Different neighborhoods also have different housing costs and property taxes, along with homeowner association fees. You can discuss all of this with a certified realtor to make an informed decision.

 

 

Detached house or attached units?

Some homebuyers want a backyard and a patio, so they invest in a single-family home. Other people like living in townhouses or condos if the neighborhood is heavily populated.

An upper fixer or move-in ready home?

The next thing you need to find out is whether you’d like a home that you can move into ASAP or take on a property that needs some work. A property that requires a bit of TLC can be a little more affordable than a move-in-ready home.

 

Obtaining a Home Loan

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The type of home loan affects what a homebuyer needs to qualify for that loan. Selecting the right home loan is important since it’ll make it easier to pay it back and make it likelier for you to get approval.

Here are some common types of mortgages.

  • Conventional loans: These mortgages are not guaranteed by the federal government. They have stringent qualifications and a low minimum down payment
  • VA loans: These loans are from the Department of Veterans Affairs and are provided to active or former service members and eligible spouses.
  • FHA loans: These mortgages are backed by the Federal Housing Administration and are much easier to qualify for than conventional loans.
  • Renovation loans: These loans allow homebuyers to renovate their homes for the total amount of the home loan.

 

Looking for more real estate advice as a first-time homebuyer? Get in touch with highly qualified real estate agents in Jacksonville.

Chad Damato and his team of real estate professionals have a decade of experience providing comprehensive real estate services and are dedicated to helping home buyers and sellers with their complex real estate needs.

Reach out to them today to buy or sell a home with licensed realtors.