Buying a house is a wonderful and exciting milestone! Whether you’re doing so to establish more financial independence or want a place to raise a family, homeownership comes along with a lot of ups and downs. The first of which is the homebuying process, something that is both fun and stressful at the same time. If this is your first time browsing the market for a house, there are likely a lot of things you might not know about. Preparing yourself before you decide to buy a house is going to be key in making sure that the process goes smoothly. Here are some tips for buying your first home!
Hire a Realtor You Feel Comfortable With
When purchasing a house, you’ll want to pair up with a real estate agent who you feel confident about. During the process of hiring a realtor, interview several agents and question them about their experience in the current market, how they’ve handled challenges in the past, and what their plan is to help you through your first home buying process. You will want someone who has connections with others in the industry, like inspectors and closing companies.
Determine Your Budget
Before jumping right into scheduling viewings and going to open houses, pinpoint what you can afford. This number will be based on your income, your debt-to-income ratio, and how much you’ve saved up. We suggest using a home affordability calculator to help you get a better answer of what your budget should be. By having a clear understanding of what you can afford, you’ll be able to narrow down your search and find your dream home faster!
Get Comfortable with the Local Market
Lately, many areas in the country are in what’s known as a seller’s market. What this means is that there are more people who are looking for a home than there are home’s available. While there are plenty of factors that led to this type of market, the supply shortages caused by the COVID-19 pandemic have exacerbated it. If your local area is in a seller’s market, be prepared to deal with a good amount of competition. Be on top of new listings, get ready to make offers, and stay in good communication with your real estate agent.
Become Familiar with Mortgage Requirements
Because of the pandemic, the mortgage interest rates went down, making it more affordable for a lot of people to buy a house. However, even though the interest rates dropped, the requirements for people to purchase a home became more strict. You will need to have a high credit score, low debt-to-income ratio, and a sizable downpayment in order to be approved for a loan. Something you can do to prepare yourself for a home loan is to get pre-approved, which is exactly what it sounds like. Pre-approval will show you if you’re eligible and if so, what you’re eligible for before you start the actual process, which could take several weeks.
Buying a house should be an enjoyable process, not one that’s drawn out and stressful. Hiring a real estate agent who you trust and getting your financial ducks in a row are some places to start because preparation is key. Before you know it, you’ll own your first home!