Buying a home is a big step, and it can be easy to forget to do something in the process. Many people want to jump right in and start looking at houses right away, but there are a lot of things to consider before you get to that point. REILLY, REALTORS® is here to help make the home buying process as smooth as possible, and our experienced team of agents can answer any questions you might have along the way and help you achieve your goals.
Here are 5 steps you should take before house hunting:
1. Find out your credit score. - The most widely used credit score is the FICO® score, which can differ based on the 3 credit bureaus: Experian, Equifax, and TransUnion. Each bureau determines your score based on credit reports at that bureau, so not all of them will have the exact same information. Generally, there is no specific number that will indicate whether you're a good or bad person to lend to, but higher scores do tend to be looked at more favorably. There are a number of institutions that will provide your free credit score from at least one bureau, so it's a good idea to find out what it is before you approach a lender so there aren't any surprises.
2. Get pre-approved for a loan. - Before setting your heart on a home, it's a good idea to find out what you can actually afford. A lender will work with you to see how much you are eligible to borrow based on your credit report, pay stubs, and bank statements. Getting a letter of pre-approval can also give you a leg up when you are ready to make an offer on a home, showing the seller you are serious and ready to buy.
3. Determine a long-term budget. - Buying a home costs more than just monthly mortgage payments; it's important to factor in property taxes, utilities, upkeep, and warranties. Even before the purchase, buyers can be exected to pay several hundred dollars for thorough appraisal and inspection reports. Having money put aside for repairs and general savings is never a bad idea, especially when it comes to one of the largest purchases you'll make in your lifetime.
4. Decide what you want in a house. - Your financing is set and you know your price range - now it's time to decide what you want your house to be like. Are there any must-haves or things you absolutely don't want in the home? Now is the time to figure out where you picture yourself and if you can afford it, or if you have to make some adjustments to what your dream home looks like. Consider if building a home to your specifications is an option too.
5. Research neighborhoods. - It's better to find out if you can live in the neighborhood before falling in love with a home right next to a busy street, or in a neighborhood rife with crime issues. Many people consider school districts when choosing a neighborhood, while others are concerned about recreational activities in the area. Whatever your preference, our neighborhood guide can help you find the right fit.
Looking to buy a home in Austin? Contact us today for information and expert advice about Austin real estate.