When you decide to search for your first home, there are a few things you need to take care of before contacting a real estate agent. After you start looking at houses and find the one you want, there are other things you need to take care of before you get your house keys. Keep reading to find out what needs to be done for your home buying process to be an easy one.
Know What You Can Afford
When you talk with a lender, they’ll look at several financial variables to determine what type of loan you can borrow, as well as the amount and interest rate for which you are eligible. This moment is exciting until you look at houses in that range and realize what the monthly payments will be. How is that possible? Why is the number the lender gives you so much different than what you can actually afford? That happens because the lender looks at your paycheck before taxes are taken out.
Don’t forget- we work with many lenders that are familiar with our services, and they want to save you money. Get in contact with us to learn more.
Create Your Budget
Once you know the amount of your pre-approval, sit down with your spouse and figure out the real amount you can afford to pay each month. Consider your utility payments like cable and internet, garbage, water, heating, home insurance, and taxes. You don’t want to put all of your money each month into your house payment, leaving you unable to add to your savings.
Check Your Credit Score
You will need a high credit score to get a reasonable interest rate on your loan. The better your credit, the lower your interest rate will be. Most loans are at a fixed rate, meaning that you’ll pay the same interest rate for the full term of the loan. The offered rate depends on your credit score, so while you are in the process of looking at homes, make sure you are working to increase your credit. Even if your pre-approval is higher than what you can actually afford, your interest rate can save you money in the end if it is as low as it can get.
Save for a Down Payment
A down payment will be anywhere between 3.5 and 20 percent of the cost of your home. One piece of advice you’ll get when saving for a down payment is to put in what you think your monthly payment will be. By saving that amount each month, not only will you have a more substantial down payment, but you’ll also know whether you can realistically afford that monthly payment and will get in the habit of paying it before you start paying back your loan.
Make Sure You Have Enough to Cover Closing Costs
Closing costs are extra fees that are part of your home purchase that you pay at the closing of your transaction. These additional fees cost about two to five percent of the purchase price of your home. If your house costs $150,000, you will pay between $3,000 and $7,500 in closing costs.
Remember- when you work with a Homes for Heroes real estate specialist or lender they will give back part of their commission to you, as a thank you for your service to our country.
Find a Great Real Estate Agent
There are many ways to find an experienced real estate agent that can meet your needs. Naturally, we recommend using our SIGN UP page to find one not only local to you, but one that will also save you money in the process.
Be Present at the Home Inspection
Once you are under contract with a seller you will need to pay for a home inspection. The home inspector is the only person in the process of purchasing your home who you will pay, and therefore is one of the most important people who helps you get what you need.
The home inspector will look through your house and will find any issues that should be taken care of before the purchase can go through. For example, if the house has a wood stove that is not EPA certified, you can request to take the cost of replacing it off of your final purchase price. You can also ask that the seller replace the stove before completing the purchase.
Ask the inspector if you can join them during the inspection. Bring a notepad, pen, and flashlight so you can see what they see. You’ll get a copy of the inspection either way, but going along with them allows you to ask questions and see what they mean when they give specific information that you may not understand otherwise. The home inspection will save you a lot of money in the long run, so make sure you choose someone you trust. If they offer to do the repairs for you, don’t accept. It’s unethical for them to give you a bid on the inspected aspects of your property. It’s best to pay for the inspection and the work with a different contractor to fix any issues you find with the house.
If you head on over to our local deals page, you will be able to find home inspectors that give discounts for Heroes like you. It’s just another way we can say, “thank you.”
Homes for Heroes
If you a current or former military service member, teacher, firefighter, law enforcement officer, healthcare worker, or emergency medical service provider and you are looking to purchase a home, working with Homes for Heroes will earn you $700 back for every $100,000 you spend on a house. Contact Homes for Heroes today to meet up with an Affiliate Real Estate Specialist and get started on the journey to finding your new dream home.