× Close search
Couple looking at a beautiful house to buy

Buying Your Dream House: It's Not as Difficult as You Think

Posted by Carolina Trust Federal Credit Union on Jul 6, 2020 10:14:00 AM

If you are dreaming of owning a home of your own, but are intimated by the home-buying process, don’t be! While there is a lot of paperwork and verification involved, it really is not as difficult as you may think. In fact, if you work with the right team of real estate professionals, including an experienced realtor and a reputable credit union or bank, the home-buying process is really a breeze! 

According to Statista.com, approximately 65 percent of Americans are homeowners. Are you ready to join them?  Here is a home buying checklist of everything you need to do to prepare to buy a home.

Buying a House Check List

Check Your Credit Score

The very first step in preparing to buy a home is to ensure your credit score is sufficient to obtain financing from your bank or credit union. Having a good credit score means that you have proven yourself to be “creditworthy” and it also determines the percentage rate of your home loan.

Having a higher credit score typically leads to a lower interest rate, which saves you tons of money of the life of the loan. Your credit score is so crucial for buying a house that before you even begin to look at homes for sale, be sure to obtain a copy of your credit report from Equifax, the national credit bureau in Atlanta, so you know exactly where you stand.

Report and Fix Credit Issues

Once you receive your credit report, read it thoroughly to check for any errors or issues. It is common for there to be minor errors on the report, which can be corrected by contacting the reporting credit bureau directly to have them delete any incorrect information. Errors need to be addressed before you apply for a home loan.

How Much Home Can You Afford?

Next, make sure you are clear on how much home you can afford. Consider your income, current debt, and other personal finances to determine how much you can comfortably afford to pay each month for housing. Using a mortgage calculator, you can easily analyze what your monthly mortgage payment will be, considering variables such as down payment amount, type of mortgage, interest rates, taxes, homeowners insurance (including wind, hail and flood), HOA (if applicable) etc.

Choose a Mortgage Lender

Once you have checked your credit score, disputed any incorrect information, and decided on the price range you’d like to stay in for your home purchase, the next step is to secure a lender. Choosing an experienced mortgage lender is crucial for a stress-free home-buying process and it should be taken very seriously.

A credit union is an excellent choice for a mortgage lender, as they typically have great rates and experienced loan officers who can help make the process a smooth one.

mortgage product page

Obtain a Pre-Approval Status for Your Mortgage 

Your credit union loan officer can pre-qualify you for a mortgage and let you know how much you can spend on a home, based on your credit score, income, debt, etc.

Once the lender has determined your loan limit, they will give you a pre-approval letter that indicates that you are qualified to purchase a home within your pre-approved spending amount. This lets the seller know that you are ready, willing, and qualified to purchase their home, and it gives you the freedom to make offers when you see homes that meet your criteria.

Down Payment on Your New Home

Home-buyers get the best rates when they have at least a 20% down payment on their new home. But in reality, not all of us have access to that kind of cash. No worries though, as this is not mandatory to receive a home mortgage, and home-buyers can typically put down less. Check with your lender to see if you may qualify for any special programs that are in place for homeowners. 

Be Aware of Changes in Finances

Once you have decided to purchase a home, it is crucial to be aware that any changes in your finances can jeopardize your home loan. Even the smallest changes can affect your credit score in a negative way and prevent you from closing on the purchase.

Do not change jobs, buy a car, or apply for a new credit card during the time you are shopping for a new home or waiting to close on your mortgage. Even just having a credit card company or automotive dealer pull your credit score can have enough negative impact to cause your loan to fall through or require additional review.

Select a Realtor

Choosing an experienced real estate professional to assist you with your home buying purchase is an essential. It not only helps to make the process easier, but it also puts someone in your corner to work and negotiate on your behalf. Realtors have access to all local homes for sale and likely have inside information about the local market, which is great for negotiating, etc.

New Home Preferences and Needs

We all have a wish list of what we want on our new house checklist, and we all have a list of must-have necessities as well. Decide early on and be realistic about what criteria you are willing to live without and what items are non-negotiable.

Consider things such as a specific school districts, number of bedrooms, street location, neighborhood, a fenced yard for kids or pets, etc. It is often a good idea to narrow the criteria down into three lists such as non-negotiable items, things that would be nice to have but you can live without, and extra wish-list features. Share this list with your real estate agent, so they can search for the perfect home for you.

Check Out Home Listings Online

The internet is a wonderful thing, especially when it comes to being able to buy a home. Use it to your advantage to browse homes for sale in your ideal areas.

Customize your search to include the desired number of bedrooms, price, location, view, and more. Searching for homes on the internet is such a convenient way to narrow down your house hunting and save valuable time by checking out homes for sale from the comfort of your couch!

Attend Frequent Open Houses

While it is convenient to be able to look at homes for sale on online to narrow down your search, it is also a good idea to visit as many open houses as you can, because it helps you get a real feel for a home when you see it in person.

Open houses offer a convenient and stress-free way to see many homes in a short amount of time. Make a list of open houses in your area and visit the houses and neighborhoods of interest, making sure to take notes and pictures of each home so that you can discuss their features later.

Location, Location, Location

It truly is all about location when creating your buying a house checklist. When you buy a home, you are not only buying the actual residence, but also the community in which the home is located. Take some time to scope out local amenities, shopping, restaurants, schools, and even the neighbors.

Just because you love a home does not mean that the community is a good match for you. It is a good idea to visit the area at various times during the day and evening to get a good feel of what the neighborhood has to offer.

Buying a home is an exciting adventure, and definitely not as difficult as you might think. It’s just a matter of having the right team to help you get the job done. Following these home-buying checklist tips gives you a head start on the home buying process and ensures you the best possible chance to find the home of your dreams.

mortgage product page cta 2

Topics: Real Estate & Home Buying, Credit Building