Achieving your big goals in life like buying your first house will definitely make you feel happy, fulfilled and proud. However, you should make sure that you are 100 percent prepared before making any decision especially as big as buying a house. You do not want your dream to become a nightmare because of your rash and thoughtless decision.
There are numerous steps that you should accomplish before you can say that you are ready to turn one of your dreams into reality.
- Strengthen your credit score – improve your chances of getting a better deal in terms of down payment or interest fees when you have higher credit score. Thus, it is recommendable to know your credit score to ensure that you’re not unfairly penalized for old debts. Also, be sure that you pay up your debts including other loans and credit card debts. It is also recommendable to stop applying for new credit a year before you apply for loan.
- Know your needs – how big of a house do you need? Of course, it is practical to think of long term so even though it is only you and your partner now, you should buy a house for your family like with two or three kids. Do not go overboard too by going too big. Choose a house that fits your family comfortably.
- Research the market – it would be beneficial for you to study the market too. Choose a good location that has potential to increase its value in the coming years. It would be helpful to consult real estate agent for professional advice and consultation.
- Save for down payment – you should have money for the down payment so make sure that you save for this. Once you have money for the down payment then you can start considering buying a house.
- Build up your savings – besides your money for down payment, it is also best that you have life savings. You will feel more confident knowing that you have money that you can use in case of emergency like if you lose your job in the middle of paying your mortgage.
- Get a pre-approved mortgage – choose the best home loan type for you. For beginners, it is easier to get approved for variable home loan type. However, most people prefer the fixed rate home loan since they are able to budget their money monthly knowing the exact amount that they need to pay. It is best to check out home loan home page to know more details about different home loan types including the most ideal for your situation.
- Buy the house that you like – once you secured all those items above, then you can say that you are ready to buy the house that you like. Congratulations!
One of these days, you will be able to buy your own house. For now, make sure to check the lists we discussed here to prepare you well.