1) Homebuyer Education
The more time you can spend up-front learning about the home buying process, the more satisfied you will be and more money you will be able to save. This step of the buying a home checklist is often overlooked which can cause buyers to feel stressed and not confident during the home buying process.
Working with a professional Realtor and lender will help you get all your questions answered about the home buying process. If you want to learn more about buying a house you should consider checking out my YouTube channel.
2) Get your credit score in order
Check your credit score to see where you are at. The higher your credit score, the lower your interest rate, home insurance and private mortgage insurance will be.
Credit Karma is a free website and app that will give you a credit score and report. Your Credit Karma score may not match with the lender’s but it will give you a great idea of where you are at.
Many credit cards will offer free services that can provide you with credit score as well.
3) Set up a budget
A quick way to know what an affordable monthly house payment is for you is to look at what you are currently paying for rent or house payment.
I have link at the end of this post to download an excel spreadsheet that will help you estimate on how much you can afford.
4) Figure out how much down-payment you can afford and how much your closing cost will be.
The median down-payment first-time homebuyers pay is 7%. If you can afford paying 20% it would help you get rid of private mortgage insurance.
Closing cost can range anywhere from 3-4% of the home price. Keep in mind that closing cost can be negotiated with the seller.
5) Get Pre-approved by a lender (Most important step of the home buying checklist)
It is important that you get pre-approved before looking at homes so that there aren’t any surprises if you find a home that you love but then learn you don’t qualify. Your lender will look at your income, assets and credit history and then based on this information they will let you know if you qualify for a home loan and what the numbers would look like. If you don’t qualify, they will give you next steps and things you should do to qualify in the future.