Buying a home is exciting without a doubt – and contrary to what most people think…it can be a simple endeavor. There are mortgages to get approved for, and decisions to make, such as a community and home to invest in, so some advance planning is helpful. Here’s a look at how to best plan your home purchase:
Prior to writing a contract
- Improve your credit score: Credit scores are based on how well you pay your bills, your previous payment history and how much you owe. So, check your credit score – if it’s unsatisfactory, take measures to improve it.
- Save: When you put an offer on a home, you will usually need to put down a minimum of 3.5% for a down payment. So, make sure you save in advance! Adjust your lifestyle so that you’re putting aside money from every paycheck to go towards a down payment. Sometimes, there is also bond money available for your down payment, and if you are Native American or a Veteran, there are loans that can help you purchase without that 3.5% up front. So, check out your options if you haven’t saved up a lot of cash yet.
Prior to the Purchase
Now that you’re on the right path to a good credit score and a down payment, it’s time to really start getting into the nitty-gritty of things:
- Research: Select the areas where you want to live and get a feel for what homes you can afford. At Home Creations, you’ll have the guidance and support of a New Home Consultant who’s familiar with communities and areas – and who can help you navigate the buying process.
- Also, be sure to do your homework on the advantages of homeownership. Remember, your mortgage interest and property taxes are deductible, you are earning equity, and saving on energy costs in a new home. All those items can help you with finances as figure your new home payment into your budget.
Prior to Purchasing
Your credit score is now good, and you’ve done your homework – now it’s time to take the next step:
- Visit the community and homes: Most new communities have models you can tour and New Home Consultants who can answer your questions. If the area you desire does not have a new home community, a Realtor can help provide a list of used homes to facilitate your search.
- Get mortgage pre-approval: A mortgage pre-approval is basically an unofficial estimate on the type of mortgage you’ll likely be able to afford, which can help narrow your search and know what to expect when you get official mortgage approval.
Ready to Purchase!
You’ve improved your credit score, done research on the cost of homeownership, visited a community and got pre-approved for a mortgage. You’re in the home stretch!
Now, it’s time to select the home and write a contract. You will then get the needed documentation to secure that mortgage loan so that you’re ready to go once you find a home that you like and decide to submit an offer.
But after your offer has been approved, you’ve still got some work to do. If it is a new custom home, you will need to select your colors and attend a color meeting. If it is a completed new home, you will need to do a walk-through to inspect the home with the builder and their warranty department so you can learn about your new home and also make any needed notes for last minute punch list items.
Remember, buying a new home isn’t just buying a new physical living space – it’s buying a new lifestyle. So be sure you carry out your due diligence and do all of your homework ahead of time so you find the home that best fits your needs.