Your dream home doesn’t have to be something far off in the distant future; it can be something you start looking for now if you’re smart about how you approach the process. You can’t just go out, find a great place and sign on the dotted line. You need to do some advance planning and take several factors into account before you begin house hunting. Check out these seven tips to help you find your dream home and you’ll soon be ready for move-in day.
Determine your budget. The first step in finding a home is to know what you can afford to buy, which includes consideration of what you can afford as a down payment, monthly mortgage payments, insurance and other typical household expenses. There are several online calculators you can use to assist you in finding a proper budget.
Take time to create a list of needs and wants. There’s a big difference between what you want and what you need in your new home. Assess your current living situation and determine what you can live without and what’s absolutely essential.
Consider new construction, existing homes – or even fixer uppers. You might prefer to move into a brand new, turnkey home, but there’s plenty of existing construction that’s in excellent condition – for a lower price. You might even consider a fixer upper due to the high resale value you can experience, but be realistic before investing in a distressed property.
Explore neighborhoods. If you’re just moving across town, drive through neighborhoods to see what appeals to you. Also, consider the quality of schools that your children may be attending. For those moving far away, get some guidance from your real estate agent on suitable neighborhoods.
Run your credit report a few months before you begin your search. The higher your score, the better interest rate you can expect when it comes time to finance your dream home. Now is the time to check your report to contest any errors or repair credit history problems.
Gauge the equity in your current home. Current homeowners should get an idea of how much they owe on their existing mortgage and how much equity they’ve built. This amount will be applied to your dream home and can help you determine how much of a down payment you can afford.
Get a home loan pre-approval as soon as you start house hunting. Your loan pre-approval tells you what amount you’ll be able to borrow, which you’ll add to your down payment and/or current home equity to determine what you can spend on your new dream home.
Buying your dream home is arguably the most important decision you’ll make in your lifetime, so it’s not a process you should take lightly. There are certain factors to consider and tasks you’ll need to accomplish before you dive into house hunting with both feet. If you’re currently searching for your dream home or will be looking soon, it’s smart to consult with a mortgage expert about your goals.