Buying

8 Critical things to do before buying

Crunch your numbers

First, ask yourself not if you’re ready FINANCIALLY. Crunching some numbers and details, such as your income, desired location, and other factors and see if your expectations jive with reality. Good luck!

Know Your credit score

OREYour mortgage’s interest rate- and, as a result, the size of your monthly payments—will be directly related to your credit or FICO score, which is essentially a summary of how reliably you’ve been paying off your debts. Many major lenders require a score of at least 620 for a mortgage, but if you find out you’re below that you will want to boost your score.

A Mass Down Payment

Most mortgage lenders require a cash down payment of 5% to 20% of the price of a home. Depending on your location, that’s anywhere from $14,635 to $58,540! You can save by putting off buying any big-ticket items, fancy vacations or other extravagances. This is a new home we’re talking about, remember? You can also explore other ways to come up with a down payment fast—like borrowing from your IRA or even getting a gift from your parents (lucky you).

Get Educated 

Understanding the nuts and bolts of how it works. Consider taking advantage of local home-buying seminars, often offered by banks or nonprofits.

Interview At least three real estate agents 

Don’t just settle for the first agent to cross your path—remember, a house is a huge purchase, the stakes are high. In the same way you’d want to thoroughly evaluate a surgeon before upcoming surgery, make sure to do the same here.

Go Mortgage Shopping

In the same way you wouldn’t buy the first house you set foot in, you shouldn’t commit to the very first mortgage you meet, either. Find a lender you trust to discuss your financial situation. Our trusted Lender is Cara Hawkins at Ameripro Home Loans.

Ballpark Your Closing Costs

These expenses range from 3% to 6% of the purchase price thanks to taxes, transfer fees, and other expenses. So, make sure to budget for this expense so you aren’t blindsided come closing time.

Ponder the Future

Establish an emergency fund with enough money to cover three to six months of living in case you’re faced with an unexpected financial hardship. Also consider a term life policy that runs at least 20 years and would pay off the home if something tragic happened.

 

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