Are you looking forward to invest your money and purchase the very first home? Then you are about to make one of the best investments that you can ever do in your life. You should also be careful with this investment because there is a high possibility for things to go wrong. You will not notice such instances due to lack of experience and you will end up with frustration in the long run.
Here is a list of 5 steps that you can think about following as a homebuyer. Any person who purchases the very first home can follow these 5 steps and go through a smooth process.
- Take a look at the credit score
Keith Lawrence of EXP Realty states; the very first thing you need to do at the time of buying your first home is to go through the credit report. It determines whether you are eligible to invest on your very first home or not. In other words, you need to make sure that the credit score is decent enough to invest on a home.
In order to get into a mortgage program, you will often be asked to maintain a credit score of at least 620. However, there is a possibility for you to get a FHA loan with a credit score of 580. Due to this reason, the FHA loans are extremely popular among the first time homebuyers in United States.
It will not take a long period of time for you to improve the credit score. If you notice that your credit score is not good to go for a mortgage, you don’t need to worry about anything. All you have to do is to take a look at the methods, which can help you with improving the credit score. Then you will be able to go for the mortgage without any difficulties.
- Make sure that you can afford a new home
After sorting out the credit score, you need to make sure that you are in a position to afford a new home. Most of the first time homebuyers tend to go ahead and invest in homes, even if they are not financially strong enough to afford a one. This can lead them towards a lot of financial difficulties in the long run. Hence, you need to make sure that you are financially strong to afford a new home.
You need to take a look at your monthly income and expenses. Then you can see whether mortgage payments can be accommodated to it. If not, you are encouraged not to go ahead with a new home.
- Looking for a home
The next step would be to get into the market and look for a home. Before you start looking for the options, you should have a clear understanding about the features that you look for in a home. In other words, you need to write down a list of all the things that your ideal home should have. For example, you need to note down how many closets and bedrooms you need to have in the house. If you can keep those requirements in the back of your mind when shopping for a home, you will be able to end up with the best option available in the market.
It is important to take detailed notes of every single home that you see. When you are looking for home, you will walk through a lot of options. Hence, you can easily forget the differences that existed in between the different homes. But when you take notes, you can analyze them at a later stage and go ahead with the best available option.
You should also compare the estimated value of the home online along with the price that you were asked to pay. Then you can try your best to negotiate the price. When you are purchasing a home, you have a great potential to negotiate and get your home at a lower price tag.
- Finding a real estate agent
If the process that you have to follow in order to look for a home is overwhelming or if you think that you cannot do it on your own, you are encouraged to get in touch with a real estate agent. You will have to pay a fee for the service that you obtain from the real estate agent. However, it is totally worth when compared to the service that you will receive.
You need to be careful when looking for a real estate agent as well. Since you don’t have any previous experience with purchasing a home, the real estate agent can fool you. Hence, you must go ahead with a reputed and a reliable real estate agent, which you can trust. Then you will be able to receive a hassle free service at the end of the day.
- Sealing the deal
Now you have done most of the hard work and you have located the best house that you can invest in. Therefore, you just need to go ahead with securing the deal. That’s where you need to evaluate the warranty options and the homeowners insurance. You can shop around and get your hands on the best policy. The homeowners insurance must be selected before you close the deal. Then you can work with an attorney or your real estate agent to prepare all the documents required. These documents will take some time. In the meantime, you can ask any questions if you have and get them clarified.