4 Steps to Take Before Buying a Home

Are you thinking of buying your first home? It’s a great time to get started with your search, as a relatively mild winter up until this point has jump-started the spring market and sellers are already listing their homes. While it’s exciting to shop around for a place to call your own, buying a house is a big deal! In Massachusetts, the median home price in 2018 was $344,900 at 99 percent of the asking price. Before making the biggest investment of your life, learn more about how to prepare to buy your first home.

Step 1: Start saving money. Good savers set aside 10-20% of every paycheck, regardless of future plans and impending purchases, but this gets kicked into overdrive when thinking of making a home purchase. While you don’t technically have to have a hefty downpayment to buy or to get a mortgage, the reality in the Greater Boston area is that you will likely not be competitive if there are a lot of other buyers in the mix and you have less than 10% saved for a downpayment. You also want to be able to cover other expenses such as home inspections and closing costs which is typically about 1-3% of the cost of the house. And don’t forget that you’ll want to save money consistently after purchase to deal with any maintenance needed.

Step 2: Get your finances in check. Lenders will be reviewing your income, debt, and credit utilization. Avoid red flags on your credit report by keeping your debt-to-income ratio low and your available credit high. Also avoid any new credit applications at least for 3-6 months prior to applying for a home loan and any large purchases or income changes up until closing.

Step 3: Get pre-approved for a mortgage. Getting pre-approved for a home loan gives you perspective on how much home you can afford and keeps you from wasting your time looking at homes that are out of your range. Make sure that you work with a local lender who has good relationships and answers calls and emails on the weekends.

Step 4: Find a great realtor. Ask friends and family for realtor recommendations and look those people up online! This person is going to be vital to making the home buying process straightforward and efficient so do not be shy when it comes to interviewing a few people until you find the one who makes you feel like you're in safe hands. Avoid saying yes to the first realtor you meet (until after you've spoken to a few).

I wish you luck on your home-buying journey and hope you consider working with me!