If you’ve been looking for houses, you probably have a list of non-negotiables on your home buying checklist. It is essential though, to know the difference between your wants and your needs. We all have those houses that we love and wish we could own, but we know deep down that we can’t pay thousands of dollars extra for those specific granite countertops, or vaulted ceilings.
Before you start the house hunting process, there are a few steps you need to accomplish before moving forward.
Work on Your Debt
It isn’t very often that a person can walk into a lender’s office and get precisely the pre-approval amount they want. What typically happens is that you work with a lender and find out your estimated price range is lower than you expected. That could be because your credit score is not high enough. Low credit scores affect how much interest you pay, so start working on your credit today. Run a free credit report at www.annualcreditreport.com, which will tell you who your creditors are. After that, use a Debt Snowball Calculator to help you prioritize your debt repayment plan. You will be able to decrease your debt in a manageable amount of time and increase your credit score at the same time.
Save for a Down Payment
Saving money now will help you pay less later on in the home buying process. If you can save up to 20 percent of your mortgage upfront, you can avoid Private Mortgage Insurance. You’ll have a smaller mortgage which means lower monthly payments, and that is always a good thing. You can use that extra money to plan a vacation or to put back into the house to build equity.
Once Your Finances are in Order
Work with your Homes for Heroes lending specialist to complete the pre-approval process once you are ready to move forward. When you obtain the pre-approval from your lender, compare that number and your budget to see what you can afford. As a firefighter, police officer, military member, healthcare professional, EMS or teacher we understand that your pre-approval is most likely higher than you can put towards your mortgage payment. That is why you need to know your budget.
Use a mortgage calculator (like this one) to estimate your monthly payment and don’t forget to add the estimated cost of utilities like waste management, internet, and electricity. Knowing your affordable price range allows you to start talking about what kind of house you want. That is where your list of non-negotiables comes in.
Dream Home Versus Budget-Appropriate
Picture your dream home. It’s beautiful, isn’t it? The countertops are the perfect color, the yard is enormous, and every room has already been painted perfectly to suit your taste. The kitchen appliances are pretty and come with the house, and there’s a swimming pool. These amenities may sound amazing, but they tend to more than our budget can handle.
To avoid getting excited about something you can’t afford, break up your non-negotiables list into two columns. Title them “Must-Haves” and “Would Be Fantastic.” That will allow you to get excited about a house you can afford from the start.
Talk with Your Lending Specialist
Homes for Heroes Lending Specialists are experts in real estate, and they work with you to get you what you need. They will show you what features you’ll get within your price range. They’ll do everything in their power to find you the house that works for you, and at the same time, will give you a discount on closing costs as a way of saying thank you for your service.
Think About What You Can Add Later
If you purchase a house that needs updating, you can make the changes you want at the price you choose. When you buy an already updated home, you pay extra money for features you may not love. You may not like the color of the countertops in the bathroom but you just spent a lot of money buying those items with the house, so it’s illogical to purchase new ones. With a house that needs small updates, you can prioritize your options and pay less in the process of making the house your own.
Think About Possible Equity
Talk with your real estate specialist about value items. These are features that add value to the house if you’re interested in selling it in the future. These items can include granite countertops, landscaping, dual-pane windows, hardwood flooring, as well as a great view and a good school district. If your prospective home doesn’t have some of these features, consider what it will cost to add them later. If you want to add to your home and make it truly yours, you have the opportunity to add equity quickly, depending on the market and location of your home.
Imagine the Potential
When you walk into a house, focus on what it could be. Don’t fret about things like the wall color and how ugly the carpet is, because you can replace those features eventually. Instead, think about what you can add yourself to make the house your home. If the kitchen appliances don’t match, who cares right now? If they work and come with the contract, you won’t need to buy new ones. Walk into every house you look at with a positive outlook, and you will return to one of them with the keys to your new home in hand.
Homes for Heroes
At Homes for Heroes, we want to thank you for the commitment that you give to your community. Sign up today, and as a firefighter, EMS, doctor, nurse, teacher, military service member, or police officer, you will receive a check after closing for $700 for every $100,000 you spend on a home when working with a Homes for Heroes Real Estate Specialist. Work with one of our Lending Specialists and receive up to 25 percent off of their closing costs. They give you a portion of their commission and closing costs as a way of showing their appreciation.