Depending on the day and location, spring either feels right around the corner or the furthest thing from your current weather. But as temperatures climb, the housing market heats up.
If you plan on shopping for a home this spring, take these steps now to be ready to strike when listings hit the market.
Working with the right lender can make a world of difference in your homebuying experience. Unless you are paying for a home in cash, you’ll need to work out financing. Spend time researching loan types such as conventional, VA, USDA and FHA before selecting the one that suits you.
Research the best lenders to find a mortgage company with a track record of success and good customer service. Once you’ve identified a lender, start the pre-approval process. Working out financing in advance of your home search gives you a clear guideline on how much you can spend. With a lender’s pre-approval letter in hand you can identify your price range and demonstrate to an agent or seller that you’re a serious buyer.
Before you get pre-approved, you may want to check your credit scores, as they will have a big impact on your interest rate and how much money you can borrow. You can use tools on Credit.com to check two of your credit scores for free and see the biggest factors impacting them.
Determine Your Budget
Selecting a lender and obtaining pre-approval lets you know how much you can spend. Just because you can spend that much doesn’t mean you should. Create or consult your budget first.
You may technically be able to afford a $2,000 mortgage payment every month, but is it an amount you’re comfortable spending considering all your financial goals? Factor in recurring expenses like taxes and insurance if not already included in your monthly mortgage payment to understand the overall cost of the home. Finally, consider expenses that will arise during the next several years. For example, you may send a kid off to college or retire in the near future. Consider how these events will impact your budget. Only then can you determine a monthly mortgage amount you’re comfortable paying.
Find an Agent
When you mention house hunting to family and friends, many will kindly offer agent referrals. In fact, 52% of first-time buyers find their agent through a referral or personal relationship. Lining up your agent in advance lets you start your home search early. Having confidence that your agent will guide you through the entire process with knowledge and expertise is imperative.
Interview and meet with several recommended agents to find the one who best fits your personality, availability and needs, and demonstrates a thorough understanding of your market. Select an agent early in the process to prevent delays that could end up costing you your dream home.
Whether you’ve lived in the area a long time or you’re moving to a completely new location, it’s always a good idea to identify the neighborhood qualities you desire most. Start by making a list and then ranking each quality from highest to lowest.
One family may rank schools higher on their list while another ranks walkability or nearness to work near the top. Share this list with your agent so they’ll be able to identify neighborhoods that meet all or some of your criteria. Just keep in mind that agents are prohibited by law from sharing some neighborhood data with you, making it important to conduct your own research, too. Once you’ve identified specific neighborhoods, drive through them at different times of day. You’ll get a good sense of the overall neighborhood atmosphere.
For most, the real estate search is a process. Get your financing, representation and priorities in line now and you’ll be steps ahead of competing buyers.
More on Mortgages and Homebuying:
- Why You Should Check Your Credit Before Buying a Home
- How to Find & Choose a Mortgage Lender
- How to Refinance Your Home Loan With Bad Credit
- How to Get Pre-Approved for a Mortgage
- How to Get a Loan Fully Approved
- How to Search for Your Next Home
Image: Andy Dean