First-timers made up 34% of all homebuyers last year, up from the previous year, according to the National Association of REALTORS®. It was one of the most difficult periods of time for house hunters due to a national shortage of inventory and quick-paced bidding wars driving up prices. Fortunately, experts predict that 2022 will return to a sense of normalcy in the market. If you are considering getting in the game, it’s important to prepare yourself. Here are the steps to prepare for homeownership.
Step 1: Understand what you can afford
Fully understanding your financial situation is crucial for success as a potential homebuyer. Details to comb over include: your credit history, your savings, the current mortgage rates, and associated costs (a down payment and closing costs). Work closely with your lender to determine what you can comfortably afford and get preapproved.
Mortgage preapproval gives you an early picture of your options by determining how much money you could likely borrow. Lenders look at income, assets, and credit score to determine which loans you could go for, how much you can borrow, and what your interest rate could be.
Step 2: Find a real estate professional
Buying a home might be the biggest purchase you make in a lifetime. That’s why it’s crucial to have an experienced professional in your corner. A REALTOR® adheres to a specific Code of Ethics so that you can be confident they are serving your best interests. Find someone who has a proven track-record of success and complements your communication style.
Step 3: Search for a home
Step 5: Inspection & Appraising
Step 6: Closing
Here’s the part where you truly celebrate! On or close to closing day, you’ll do a final walk-through with your agent to make sure everything is as agreed upon. You’ll want to maintain all files, digitally or in print, for all warranties, insurance documents, and contracts. Keep the original closing documents in a safe place outside the home. Once everything is in order, grab your keys and start your new life as a first-time homebuyer! Congrats!