You have decided “enough is enough” with rising rents – time to get a place of your own! That’s a great first step, but what else should you do when you are getting ready to buy your first home?
Know your credit
Credit scores are an important part of your financial picture. Check your credit reports for errors. Remember to pay bills on time and to not over extend yourself with the credit you do have. It is great to have a good deal of credit available to you, with little of it used, or used wisely.
Get paperwork in order
Getting a mortgage involves producing and providing a whole lot of paperwork: 2 years tax returns, bank and stock statements, pay stubs, etc. Spend a little time gathering this information so you will have it ready to go when the time for a meeting with the lender comes.
Know your financial situation
Buying a home is a long term solution to housing needs. You should have a handle on what money comes in and what money goes out and for what – in short, be clear about your spending habits. Know what you can afford and know what you want to spend. Sit down with a mortgage loan officer or do it online and get a good idea of what mortgage you would qualify for. And just because you would qualify for X a month does not mean you have to spend that much. Choose what you feel comfortable with. Hopefully, you’ll be spending less than rent with your new house payment and will have a monthly cushion to keep saving over time.
Save for a down payment
Ideally, you have been doing this for a while now. Downpayments don’t have an upward limit – the more you put down, the less you borrow. 20% down is typical and no mortgage insurance is needed then. There are several low downpayment options where you have put down as little as 3%. Talk to your mortgage loan officer to see what options you have available. And keep saving! Cut out the fast food lunches & the purchased coffee and you’ll see the savings add up quickly.
Learn about buyer agency and select an agent to work with
You do not have to go it alone and you do not have to work with the agent whose name is on the sign or in the ad. You can select your own agent to work with and have him/her work in your best interests by signing a buyer agency agreement. (If you do not, technically the agent assisting you owes allegiance to the seller) Having a buyer agent means the agent can act on your behalf, give advice about price and negotiate for you. Any agent fee is usually negotiated in the offer to purchase so what do you have to lose?
First Weber sells real estate throughout Wisconsin: Metro Milwaukee and Southeastern WI, South Central Wisconsin, Southwest Wisconsin, Western Wisconsin, Central Wisconsin, Northeast Wisconsin and Wisconsin’s great Northwoods. You can start searching for Wisconsin real estate and Wisconsin real estate agents at firstweber.com