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Home Buying Checklist

What to do Before Buying a House

Searching for a new home can be an exciting time, but before you start looking for the ideal home, there are specific steps you need to take in the home buying process. From determining your credit score to learning about your local market, there are a variety of things you need to do to prepare before purchasing a house.

Determine Your Credit Score

Your credit score may not be at the forefront of your thoughts, but when searching for a new home, it is a crucial number. Your credit score will help determine whether you can obtain a mortgage and affect the interest rates you are qualified for.

It is important to check your credit score to help you get an idea of your standing with lenders. It will also help you determine if you need to take action to improve your credit score before you apply for a mortgage. The higher your credit score will help you receive a lower interest rate on your mortgage.

Explore Down Payment Options

The down payment is the cash you will pay upfront when you purchase your home. The mortgages offered by lenders will have varying down payment requirements. Take the time to research your state or city’s programs to see what options you have for first-time homebuyer assistance and how much you will need for a down payment to ensure you are prepared when the time comes.

Determine What You Can Afford

The last thing you want to do is overstretch your budget, so when shopping for a home, you should make sure you keep your housing expenses at no more than 28% of your gross monthly income. Keep in mind that the monthly payment for your mortgage, homeowners insurance, and taxes cost no more than that.

To determine what you can afford, you will want to consider your debt-to-income ratio (DTI). Your DTI is determined by what portion of your gross monthly income goes toward paying your current debt obligations, including housing costs, student loans, car loans, credit card payments, etc. 36% or lower is considered a good DTI to qualify for a mortgage. The lower your DTI, the better because it will make it easier for you to have room in your budget for emergency expenses. It also helps you compare home loans with a better perspective.

Find Out How Much You Can Borrow

Mortgage preapprovals from a few different lenders will show you how much money you can realistically borrow. When you apply for mortgage preapproval, you will receive a preapproval letter that will show you the lender’s offer of what they are willing to loan you under certain terms. Once you get a few of these letters, you can compare these offers to find the lowest fees and rates.

Choose the Area You Want to Live In

Before you begin searching for a home, it is important to consider different areas and neighborhoods. Each area has its personality, so it is important to choose a location that meets your lifestyle needs. You will want to consider:

  • How far your commute to work will be.
  • What type of amenities are close by.
  • Whether you want to be close to the city or in a quiet suburban area.
  • Determine the Condition of the Local Market

When preparing to purchase your first home, you will want to browse listing sites and want to check the market reports that your local real estate agencies provide. With this information, you can learn more about the demand for homes, pricing for homes in the area, and inventory of properties available for purchase.

With this information, you can better understand the competition and the pricing you are up against when you are making offers to sellers.

Choose the Type of Home You Want

You will also want to consider what type of home you want to live in. There are a variety of options out there, including:

  • Detached, single-family
  • Townhomes
  • Condominiums
  • Manufactured homes
  • And more!

Each home has its benefits, and there are a variety of options for every budget. When browsing for a home, think about your budget and lifestyle to find the right home for you.

Plan for Your Move

While searching for the best mortgage rates and preparing your down payment, be sure to start thinking about planning your move. As you plan your move, keep in mind that you may need to place some items from your previous home into storage. Placing items in a storage unit, such as extra housewares, clothing, and other items that you don’t immediately need will help you get a head start on packing.

When you’re ready, you can utilize Gardner Moving’s professional moving services to move your items out of storage and into your new home. Contact us today to learn more!

March 9, 2021

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The movers at Gardner Moving will take care of all the details surrounding your move. If you're ready for our movers to get to work, please give us a call today. We will be happy to provide you with a free, no-obligation in-home estimate.