You must take many steps before making an offer on your dream home. As excited as you might be to become a homeowner, you must ensure your finances are in order, choose the right lender, and pinpoint exactly what you’re looking for in a property.
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Don’t allow your excitement to stand in the way of
logic and research. Ensure you make the best decisions during every stage of
the process and read the following advice on what to do before buying a house.
Organize Your Finances
Your finances must be in order before applying for a mortgage. For instance, if you have a bad credit score, you might be ineligible for a mortgage or could receive a higher interest rate. For this reason, you may need to review your credit report and improve your score to receive the keys to your home and avoid expensive monthly mortgage payments. Opening a credit card before buying a house may not be the best decision, as your credit score takes a ding every time you open a new line of credit.
Bear in mind that a mortgage provider will review
your debt-to-income ratio (DTI) before accepting a mortgage
application. Paying down debts will reduce your DTI, lowering your risk to a
lender and making you a more reliable candidate for a mortgage. For instance,
you could pay more than the minimum payment on a debt, consolidate debts,
reduce expenses to make overpayments, and focus on paying off the highest
interest rates first.
Compare Mortgage Rates
Once you’re ready to become a homeowner, you must compare mortgage offers to find the best option for your monthly
finances. A little research could help you find a mortgage with a low interest
rate, saving you a significant sum each month. Also, you could discover the
best rates for specific mortgage options, such as a fixed rate, adjustable
rate, FHA loans, VA loans, conventional loans, and more.
View Many Potential Properties
Make it your mission to explore as many properties
as possible to find the best house for your finances. Online listings are a
great way to familiarize yourself with the standard of homes available in a
desired neighborhood, but they cannot compare to in-person viewings.
Discuss the types of properties you want to visit with your property buyers agent to rule out unsuitable houses, as it will help you find your dream home at a quicker rate. Also, attend as many open houses as possible until you find a property that checks every box.
Arrange a Home Inspection
Once you have found a dream property and made an
offer, you must arrange a home inspection before buying a house. A home inspector will
thoroughly review your potential new home’s condition to identify if it has any
structural issues that need addressing, such as faulty wiring, roof damage, or
plumbing problems.
If an inspector identifies a major problem, you can choose from the following three options:
·
Request
the seller fix the issue before you buy with highly regarded roofers, electricians or plumbers
·
Reduce
your offer to reflect the repair costs
·
Back
out of the deal
Depending on your state and contract, you will
typically need to arrange a home inspection within 10 to 14 days of a
purchasing agreement.
