Buying a new house is a big decision. Along with the financial side of this, you’ll also be making choices about the type of lifestyle you’ll have while you live there, which could be for years and years.
To go into this decision with clear eyes, it will usually take a bit of preparation beforehand. To help you with this part, here are three things to do before you start looking to buy a new home.
Figure Out Your Budget
While you might have a wishlist of items that you’d love to have in your new home, what you should really be most concerned with is your budget.
When figuring out your budget, Sabah Karimi, a contributor to U.S. News and World Report, recommends that you think both about how much you can afford on a monthly basis and how much you’re comfortable spending for the entire price of your home. This will require you to think about how much you’re currently spending each month to see how much you have to commit to a monthly mortgage. Additionally, you’ll also need to decide the price point for homes you’ll look at, which might be lower than what your lender will actually approve you for. But to make a wise financial investment, you want to be sure that you’re not stretching yourself too thin.
Shop Around For The Best Rate
Once you’ve got your finances in a good place and you think you’re ready to start looking at houses, the first thing you should do is begin looking at a mortgage before you actually look at any homes.
As you do this, David Weliver, a contributor to Money Under 30, advises that you shop around for the best possible rates for your financial situation. Depending on the type of lenders you speak with, what your credit score is, how much you have saved for a down payment, and other factors, the interest rate you’ll qualify for will vary. But to really do your due diligence, make sure you’re getting at least a few quotes from different lenders so you can know that you’re getting the lowest rate.
Get Your Mortgage Pre-Approved
On today’s home market, what can really set you apart and give you a greater chance of securing the home you want is by having a mortgage pre-approval in place before you even make an offer on the home you want to purchase.
According to Cathie Ericson, a contributor to Realtor.com, many sellers only take seriously the offers that come in with a pre-approval for their mortgage loan. This helps them to know that, as long as they accept your offer and everything checks out with an inspection, that there will be little standing in the way of the sale going through and finalizing.
If you’re wanting to buy a new home in the near future, consider using the tips mentioned above to help you get yourself prepared for this big life step.