If you’re buying your very first home, you must be feeling a multitude of emotions: excitement, overwhelm, fear, and more. No doubt buying a home is a big deal and is likely the biggest expense you’ll ever have. You’ll be obligated to pay your mortgage on time and in full each month, and you’ll have a bunch of bills that you’ll need to pay to keep your home operational.
But as long as you’ve done your due diligence and taken the time to make sure that you’re both emotionally and financially ready to make a home purchase, there should be nothing to fear. Give yourself plenty of time to prepare, team up with a seasoned real estate team, and follow this checklist to make sure you’ve got all your ducks in a row when it finally comes time to seal the deal.
Get a Copy of Your Credit Report
You might have an idea of what your credit score is, but how can you know for sure if you don’t run a credit report? You’re allowed to check your report once a year without being penalized for doing so. This will give you the opportunity to not only check to see what your score is, but to see if there are any mistakes on it. If there are, they could be pulling down your score and could prevent you from getting approved for a mortgage. If you spot any mistakes, have them looked into right away.
If your score is high, great. If not, you might want to start making some changes to help give it a boost. For starters, make sure all of your bills are being paid on time and in full every month. Make sure you’re not maxing out on your credit card expenditures, and don’t take out any loans on credit before applying for a home loan. If you’ve got old accounts or credit cards, leave them alone - old credit is often looked at as good credit.
Your credit score is important, as it will be one of the major deciding factors for your lender before you’re approved for a mortgage.
Get Pre-Approved For a Mortgage
Speaking with a mortgage broker before putting an offer on a home will help you identify how much you will be able to afford in a home purchase. What’s the point of looking at homes you can’t afford? This will only lead to disappointment and will waste your time. A mortgage pre-approval will help you narrow down your focus on the price range you should be looking at.
A pre-approval will also help you look better to sellers, who prefer to work with buyers who have shown that they’re serious about buying and are actually qualified to make a purchase. While a pre-approval doesn’t mean you’ll get approved for a mortgage after your offer has been accepted, it is still a step in the right direction.
Make a List of Your Must-Haves
Your real estate agent is going to want to know all the details about the type of home you want to buy in order for them to be able to narrow down the homes you inevitably go visit. As such, it’s important for you to have a list of all the features you want your home to have.
To make things easier, try to categorize the features that you absolutely need and must have versus those that you are open to sacrifice if need be. It can be really tough to get all the things you want on your list in the home you buy, especially if you’re on a budget. Bring this list with you when you go visit homes so that you don’t forget some of the features that you are looking for in a home.
Research Different Neighbourhoods
You’ve probably got your heart set on one particular neighbourhood, and if so, be sure to do a little research on it to make sure it’s the spot you want to plant roots in. You should probably look into other nearby neighbourhoods as well just to keep your options open in case there are properties that meet your needs in other communities. You’ll want to know about the neighbourhood’s amenities, walking score, schools, proximity to public transit and major roadways, parks, and crime rate before you buy into it.
The Bottom Line
As a first-time homebuyer, you’ve got a lot to do before you put in an offer on a home. The better prepared you are, the higher the odds of a successful deal that you can be happy with.