10 Ways to prepare to buy real estate
1. Define your budget - Decide how much you want to spend.
2. What do you want in a property - Define what is needed, like to have and nice to have.
3. Location, location, location - Based on your ideal criteria for a community, define the areas where you will look.
4. Down payment - Save money for a down payment and for a reserve the lender may require.
5. Make sure your credit is in order - Once a year you can obtain a free copy of your credit report on this governmet sponsored site. Make sure it is accurate and to correct any errors immediately. Identification theft occurs and the biggest area you can be affected, besides creditors chasing you, is to have bad credit.
6. Get pre-approved for a mortgage - The loan officer will ask you some basic questions as well as ask for your income, SSN (to check credit) and debts. They will then give you a mortgage pre-approval based on these factors.
7. Paperwork for the loan - The loan officer will need for you to: (a) fill out a loan application; (b) provide last two years tax statements and W-2 forms; (c) provide copies of last two month's pay stubs; and, (d) provide copies of last two months of all financial statements (bank, credit union, 401K, etc.).
8. Down payment sources - You may qualify for a special mortgage that does not require down payment, or, a down payment assistance programs. State & local governments may have down payment assistance programs for first-time buyers. You may have also have the savings, or have other sources which a loan officer can help you identify.
9. Monthly payment - Besides paying back the loan, you should factor in property taxes, insurance, maintenance and utilities, and association fees, if applicable. For maintenance, a good rule of thumb is to place 1% of the homes value in a reserve account, so that your normal cash to live is not affected when home repairs are needed.
10. Contact a Realtor© - If you have not already spoken with a Buyer's Agent, find an experienced Realtor© to help you through the buying process. Fill out the form below and we will contact you soon.