Three key steps for first-time home buyers

For those considering first-time property ownership, it may seem like there is a long list of details to iron out once the search begins. However, before potential buyers even start looking for homes, there are three important steps to take.

The first step is to get your finances in order. It is crucial to check your credit rating and get pre-approved for a loan. A good credit rating is essential to getting a mortgage at the best possible rate.

Starting at least a year (or even two) before planning the purchase will give you a chance to pay off or eliminate any major credit card or other debt that may affect a potential mortgage.

“I would suggest a first-time buyer speak with a lender,” says Angela Walters, REALTOR® at EXP Realty and chair-elect of the Greater Milwaukee Association of REALTORS. “Sometimes buyers assume they can’t qualify, but they can be pleasantly surprised when they talk to a lender. I encourage people to contact a lender whether they think they’re ready or not, because a early conversation can help them do the right things. If you apply a year early and find out you’re not ready, at least you’ll know more specifically what you need to do. You may have to repay or repay some debts to improve your debt-to-income ratio.You can also get advice on whether debt consolidation would be good or bad, or whether to hire a credit repair company, etc.

What you don’t want to do when considering buying a home is make another major purchase that involves a loan.

“If you buy a new car before buying a house, your debt ratio may be too high. So if you’re planning on buying a home in the next year, hold off on any other major purchases to keep your credit rating as high as possible. Then after you buy the house, you can buy the car and you can buy the nice furniture,” says Walters.

Once you have an idea of ​​how much home you can afford, do some thorough research into the recurring expenses that come (and keep coming) before and after you make your first mortgage payment. Make sure you know what you’ll pay for closing costs, moving, insurance, taxes, utilities, repairs, maintenance, and even potential changes to your commute.

The third step is to establish a relationship with a real estate agent. A real estate agent can help you with the first two steps and more, so it’s a good idea to find one before you’re ready to start looking.

“It’s never too early,” says Walters. “We have systems in place to help us stay in touch with people and support them until they’re ready to buy. Just be honest that you’re not quite ready yet.

But you might be ready sooner than you think, so it’s important to be strategic in your planning.

“Someone can look at the houses we send them and all of a sudden they see their dream house. Even though they wanted to wait until next year, that perfect house appeared and they want to jump on it,” says Walters.

Organizing your finances can help you make this dream a reality.

Another way to prepare for home ownership is to contact Housing Resources Inc. (HRI). HRI is a Milwaukee nonprofit that works to support financial education and empowerment and prepares people for sustainable homeownership.

HRI offers a six-part online training course, monthly HomeWorks for Homebuyers Education workshops and one-on-one counseling sessions. Visit the HRI website for more information and the workshop schedule at hri-wi.org


Source link

Comments are closed.