4 Crucial Steps to Buying a Home

Buying a home can be an exhilarating experience, but before you get handed the keys, it’s important to do your homework. The process involves numerous people, not just your family, but also professionals like mortgage lenders, inspectors, and the seller. To make sure the process goes smoothly, keep these four crucial steps in mind.

1. Get Your Finances In Order

Your financial standing will be examined in every minute detail before a mortgage lender or bank will offer to finance your mortgage loan. Thus, to get ahead of the curve, it’s a good idea to start boosting your credit score and removing bad information from your credit report even six month’s ahead of the time you will be buying a home. Save up a 20 percent downpayment and you won’t have to pay extra on Private Mortgage Insurance (PMI) each month, which can help you afford more home upfront.

2. Shop for Lenders and Get Pre-Approved

The next step is to check out rates and offers at different lenders. You want to understand what the best type of loan is for your situation and how you can get the best deal. Different lenders may have better deals on the APR as well. For instance, credit unions are known to give exceptionally good deals to their members when financing a home loan. If you’re not sure what types of loans are out there, you can always let lenders compete for your business on a directory listing of lenders, like LendingTree.com. Try to get pre-approved so that when you are ready to make an offer, the seller will know it is a solid offer. This can help if there are multiple offers on the home and someone outbids you, but is not pre-approved.

3. Select a Home That Fits Your Needs

Once you know how much home you can afford based on monthly payments, you can start shopping for a home. You will want to pick a home that not only works for you now, but can also be modified easily for growing family needs. If you have a baby on the way, you may want to figure out if 2 bedrooms are enough or if you plan on having another baby soon afterwards. Get the square footage you need, in the neighborhood that you want that has the amenities to maintain the lifestyle you prefer.

4. Make a Decent Offer

Once you’ve located a house within your budget that is perfect for your family, make sure to put in a decent offer. Include a good amount in the earnest money so the seller knows you are serious. Understand the market in that area and whether you can bring in a lower bid or play it safe with a higher offer. Do not insult the seller with too low a bid or they may not counteroffer at all. Once everyone is in agreement, get the house inspected and show up at closing to finalize the deal.