You’ve probably heard that the housing market is doing well despite the pandemic. Are you one of the many Americans thinking about buying a home in 2021? Now is a great time to buy a house. With record-low interest rates, you can score a great deal. But there are steps you should take to make sure you get the home of your dreams with as few problems as possible. This is what you need to know.
Get a copy of your credit report
Lenders will be looking closely at your financial history when it comes time to apply for a mortgage. Before you begin your home search, get a copy of your credit report. If you find any errors, then take the necessary steps to have them removed. If your credit score isn’t as high as you would like it, then work on improving it before you begin contacting lenders.
Save money for your down payment
One of the biggest challenges in buying a home is saving for the down payment. If you take out a conventional loan, you can pay as much as 20 percent or more for the down payment. Government-backed loans require a much smaller deposit – some even require zero down – but you must meet strict guidelines to qualify. Start saving now for your down payment if you haven’t already. The more money you can put down for a home, the better your loan terms will be.
Know what you can afford
Don’t start looking for homes before you understand how much you can afford. There’s nothing worse than struggling to make your mortgage payment each month. There are many online calculators available that can help you determine how much house you can afford. This way, you can tailor your search to make sure you’re looking at homes that are within your means.
Get clear about what you’re looking for
Once you start shopping for a home, the choices can be a little overwhelming. For this reason, you should make a list of what you’re looking for in a home before you begin your search. Include things you know you must have, such as the location or the number of bedrooms. You can also include things that would be nice to have but aren’t deal breakers like a backyard pool or a home gym. Knowing what you want will make it easy to act once you find the home that fits your needs.
Shop around and get pre-approved for a mortgage
Mortgages are just like any other big expense in that you should shop around for the best deal. Ask about interest rates, closing costs, and fees. Once you’ve found a mortgage you’re happy with, get pre-approved for your loan. Buyers are entering a competitive market, and if you want your offer to be taken seriously, you need to be pre-approved.
Work with a professional
Finally, the best way to ensure success with your home purchase is to work with a professional real estate agent. This is especially true if you’re a first-time homebuyer. An agent who is an expert in your market can offer invaluable advice and help you close on the home you’ve always dreamed about!
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