Is buying your first home on your wish list for 2023? The possibility of owning your very own home can be both exciting and daunting. You don’t want to let the excitement leave you unprepared. Before you start looking for your dream home, there are other matters you need to take care of first.
Our team of Realtors at Al Williams Properties has a finger on the pulse of current trends and extensive knowledge of the real estate market along the Crystal Coast and surrounding areas.
We want to help make your dream come true and offer these New Year’s home-buying resolutions to get you off on the right foot.
1. Save for a down payment
Depending on the loan you want to qualify for, you’ll want to save for your down payment, and will probably have to cover another 1 to 3% for closing costs.
Set aside as much as $500 to $1,000 a month. Can you trade down to a less expensive vehicle or pick up a side job? Take a deep dive into your monthly spending, and cut back on any unnecessary expenses.
2. Research your financing options.
A conventional mortgage isn’t government-backed, while FHA, VA, and USDA loans are offered through government programs. Although 20 percent is generally a recommended down payment, that can be difficult for first-time homebuyers.
Take advantage of first-time homebuyer programs for low rates and down payment assistance. Look at all your options, and compare multiple offers from lenders to find the best deal.
3. Organize your finances.
You’ll need a thorough understanding of your income and expenses to begin the home-buying process. You should get preapproved for a loan by a lender before you can go house shopping. A pre-approval letter provides an estimate of how much you can spend. you’ll need to put together a list of financial information, including:
- Your monthly income
- The sum of your total monthly debt payments (auto loans, student loans, and credit card minimum payments)
- Your credit score and any credit issues in the past few years
- How much cash you can put toward a down payment
4. Improve your credit rating.
Your credit score and credit history will also determine whether you can get a mortgage and how much interest you will pay. Lenders will pull your credit and carefully review your record when you apply.
Credit scores change every month, and you should monitor yours closely and review your credit history on each of the three major credit bureaus: TransUnion, Experian, and Equifax. If you need to improve your credit, put that at the top of your resolution list.
A good way to do that is to pay down debt, particularly credit cards, by paying more than the minimum balance and paying more often. If you pay halfway through the month and then again at the minimum payment date, you can lower your credit utilization and improves your score.
5. Research neighborhoods.
Look at the house, but also look at the neighborhood. Location is the most important thing, so it’s critical to look beyond the house itself.
Figure out what you’re looking for, do research, and find a neighborhood that fits your description.
Take excursions to neighborhoods you’re interested in. Walk around, talk to neighbors who are out and about, get something to eat, and see what the area is like during the daytime and the evening.
6. Make a ‘must have’ list
It can be easy to start adding things to your list of needs (and wants) when you begin touring homes. Know what you must have and what you would like to have.
There are many things you can change within a home, including the kitchen, landscaping, bathrooms, and bedrooms. What you can’t change is the location or the lot size. Keep this in mind when you’re determining your “must-haves.”
7. Calculate the cost of living in the home you buy.
Your monthly mortgage is just one of several costs of homeownership. You need to plan for insurance, maintenance, property taxes, utilities, and homeowners’ association fees. If you are prepared for these, you can seriously strain your budget.
You’ll need some cash after the home purchase. Set some money aside for any immediate upgrades and furnishings your new home may need and for such things as moving costs and utility down payments.
Experts also advise you to set aside 1 to 2 percent of your home’s value for annual maintenance and miscellaneous repairs.
Ready. Set. Go!
Now that you know how to begin, come to us too. Our agents at Al Williams Properties are professional, experienced, and knowledgeable. We can give you the resources you need to buy your first home on the Crystal Coast.