5 Steps to Take Before Buying Your First Home

With the housing market heating up again it has become more competitive and lenders are demanding more documentation regarding the sale process which means that as a first time buyer you want to be prepared and not have anything that can snarl the process. The following 5 steps will help a first time home buyer prepare for their first home purchase.
1.  Be sure to check your credit report. Make sure that there isn’t anything that shouldn’t be on there such as paid off balances, fraudulent charges or even family members’ credit. Your credit should be as clean as possible. Pay off any and all debt possible. If you feel the need to cancel any credit cards, do so strategically. If you decide to cancel multiple credit cards in a short time period be aware that can send out red flags to lenders. The best thing to do is to close the newest cards. Lenders like to see that you have a long standing relationship with credit companies as well as have more credit available a month than what you spend. It is also a good idea to have a savings account.
2.  Create a monthly budget so that you know what to expect spending wise when you buy a home. Wright down all your finances and as you save money for your first home, live as if you are making a mortgage payment so that you will be prepared spend less money once the home is bought. Be sure to stick to your budget.
3.  Be sure to find a good agent to help you in the search and buying process of your first home. Your agent should be showing you homes with in your price range, listen to your wants and needs pertaining to the house, help you become a strategic bidder, guide you through the process and they should be concerned about making you happy and not solely about their commission.
4. Find a good lender. It is important to find a lender that explains all aspects of the loan to you and one that is willing to look over your credit report with you and give advice as to what you can do to improve it. Be sure to interview several lenders before choosing one and wait until you find one you are happy with before having your credit checked. It will be another red flag and bump on your credit report if it shows your credit has been checked several times within a short time period. Do not settle for what may seem like the best deal such as settling with a lending company which you found and signed up with online. You may get a good rate but when the time comes to speak with an agent you may have difficulty getting a hold of one.
5. Keep a look out for properties and be ready to make an offer. The market has become competitive and you want to be quick at making a wise and competitive offer. Don’t make large purchases such as a new car which may lower your housing budget. When you find the house you are interested in, call utility providers and ask for usage history or contact the HOA so that you are aware of the average costs of living at a certain property and you don’t end up going over budget. Remember to continue to live and spend as if you are already making house payments so that you don’t end up under budget.