Buying your first home? 3 steps to prepare and 3 things to keep in mind during the search

Buying your first home is both exciting and a little frightening. A lot of responsibility comes along with being a homeowner, and it’s easy to overlook some important aspects of the home-buying process. As you look forward to the busy, exciting time ahead, here are three important first steps you’ll want to take:

1. Check your credit report. Check your credit report before you apply for a home loan. Under federal law, you are entitled to one free credit report per year from each of the national credit bureaus. Request your credit report and make sure there are no errors. (It’s estimated that one in every 20 consumers have substantial credit report errors that could affect their ability to qualify for a home loan and/or obtain favorable rates.) Then pay a visit to your loan officer. The quality of your credit report is not the only factor determining whether or not you can receive a loan, but it does play a starring role.
2. Determine how much home you can afford. Before you begin the search for your dream home, determine how much home you can afford. Your loan officer will consider your income, assets, and debts. And you’ll want to take a close look at your monthly budget. Make a list of financial questions to keep on hand as you go through the home-buying process. Marking off questions answered is a concrete way to track your progress. And knowing you can add a question at any time for future discussion allows you to focus on the financial present.
3. Get your paperwork in order. Include recent pay stubs, two years’ worth of tax returns, and several month’s worth of bank statements. You may add and subtract to this file during the home-buying process, but the beauty of this system is that you can eliminate the stress of gathering these documents each time you need them. Your mortgage lender will thank you!

Now that you are ready to start the search, here are three things to keep in mind:

1. Research the neighborhood. An area that looks good on paper isn’t necessarily the same in reality. Are you moving to a community that has a similar demographic as you and your family? Do you want to locate to an area that is full of single people or families? Do you want to live near a university or shopping mall? Do your neighbors follow a similar schedule to you?
2. Look beyond the furniture. There might be nice furniture and stylish lamps in the living room, but those aren’t going to stick around once you’ve moved in. Do yourself a favor and try imagining the house without anything in it or envisioning your furniture there.
3. Find out if the property is part of an HOA. Does the home you’re thinking of buying have a homeowners association? Any HOA will have some sort of contract, laying out the rules and stipulations for the neighborhood. Review the HOA rules. Would you ever want to rent out your home? You’ll want to make sure that’s allowed under the HOA. Even if there’s no HOA, you’ll want to see if there are any protective covenants that could limit your ability to have certain animals or make any additions to your property.

Enjoy your search! If we can help, just let us know.