First Steps To Buying a Home
You’ve crunched the numbers, thought about your lifestyle and made the decision to buy a home. It can be a complicated, stressful process. But knowing what to expect can reduce some of that anxiety and help you confidently find your way to your new home.
To help, here’s a brief overview of the first steps in the home-buying process. You could swap the order of some early steps – you can get pre-approved before finding an agent, for example. But you don’t want to find the perfect place first, only to have a better-prepared buyer swoop in and snag it.
Check your credit report and score
Before contacting a lender, it’s smart to check your credit report. By law, you can get a free report once a year through Annualcreditreport.com. The report pulls data from the three major credit-reporting agencies: Equifax, TransUnion and Experian. Having the information in hand before you talk with a lender lets you dispute any errors in the reporting. Based on your credit report, Fair Isaac & Co. (FICO) assigns you a credit score ranging from 350 to 850. The higher your credit score, the lower the interest rate on your mortgage.
Figure out how much you can afford
Or better yet, decide how much you’re willing to pay. Just because you can qualify for a larger mortgage doesn’t mean you want to have that kind of payment each month. Now is also a good time to research your housing market and start going to open houses in your prospective neighborhood to give you a good sense of what your money will get you.
Consult with your DOBI Real Estate Agent
Your DOBI Real Estate Agent will be your lifeline through the process. Your agent is your chief advocate, confidante, and hand-holder in the process so you want to find a good fit.
Get pre-approved by a lender
Pre-approval requires the lender to pull the credit information and asses your financial situation. The lender will then give you a letter that states the amount they would be willing to lend you. If you get in a multiple-offer scenario, being pre-approved may give you an edge because the seller will have more confidence that you will be approved for a loan large enough to purchase their home.
Start looking at homes
Let the serious shopping begin! By now you’ve talked things over with your agent and you both know what you really want and need in a home. Armed with this, your price range and knowledge of the local area, look at listings online and with your agent, who will come up with properties for you to tour. Chances are you’ll discover some new things to love or hate about homes and refine your search.