No one wants to be riddled with buyer’s remorse after purchasing their first home. This is why it’s crucial to gather as much information as possible before heading on the road to home buying. Whether you are purchasing a single-family home, condo, or duplex, here are a few valuable tips to better prepare you for the experience.
Get Pre-qualified First
Before you reach out to a real estate agent or start looking at homes, it’s important to get pre-qualified for a mortgage. The pre-qualification will let you know the price range of the homes that you can afford. It’ll also help your home-buying process go much more smoothly when it’s time to make an offer. For example, if you’re looking to buy a condo that costs $200,000, but you only qualify for a $180,000 mortgage, you’ll need to lower your offer.
Reduce as Much Debt as Possible
The less debt you have on your credit report, the better the interest rate you qualify for. Try to tackle any debt obligations before reaching out to mortgage brokers. Lenders want to know that you have a history of making payments and that you can manage a home mortgage. A credit history with a mountain of debt and late payments can result in less than stellar terms on a mortgage loan or non-approval.
Lock in a Mortgage Rate
Timing is crucial when it comes to obtaining favorable mortgage terms. A good mortgage broker can help you get the best rate possible. It’s also important to know the difference between a rate lock and a rate quote. A rate that is locked in will be in writing and will have an expiration date. Rate locking is another step in the process that will help you to secure your financing.
Keep a Close Eye on the Market
The real estate market will likely change with the ebb and flow of the economy. Survey regional and local real estate markets to get an idea of how the market behaves. As you monitor potential homes’ selling prices, you will begin to see what factors go into their final selling price.
Know Your Rights as a Borrower
Be sure to know all of your rights before shopping for your first home. It’s essential to know about every aspect of your loan any other fees you will be responsible for when you finally sign on the dotted line.
Purchasing a home involves many complex steps and moving parts, but with the right information, you can make the best decision possible. Remember, you can never ask too many questions.