Deciding to buy a home of your own is one of the biggest steps you can take. Tax savings, pride of ownership, security for retirement and having a place to call your own are among the advantages enjoyed by home owners. How do you get started? Save yourself a lot of time and trouble by following these steps: Select your lender, Get your loan preapproved, Determine your wants, Start looking at homes.
Your bank or credit union is a good place to start looking for a home loan. Then ask your friends, neighbors, co-workers and your local Realtor® for their help in finding a source for your home loan. Be selective. Your lender should be able to explain the various loan programs offered and answer your questions. There is a home loan program available for almost everyone with income and a decent credit rating. There was a time when your Realtor® was your best source for financing information, however, with the vast variety of financing options available today it's almost impossible to be a good lender and at the same time be a good Realtor®.
Preapproval is important for several reasons. Your borrowing power may be higher than you think. Instead of buying a smaller home now and moving up later, you might be able to buy that larger home now. Being preapproved for your loan will prevent "sticker shock" later, too. The payments on the maximum loan you are able to obtain may exceed your comfort level. This is a perfectly natural reaction and it’s best to determine your comfort level now rather than later. Lastly, your preapproval for the loan gives your Realtor® a very powerful tool to use in negotiations on your behalf.
Armed with your preapproved loan and having determined your comfort level it must be time to start looking at houses, not quite. Now it’s time to separate your wants from your needs. Every home purchase is a trade off between what you want and what you need. The perfect home for everyone simply doesn’t exist. Ask yourselves, "What are the most important things we need in our home" and write them down and discuss them with your Realtor®. Some people want big kitchens, some people don’t want to clean big kitchens. If you have hobbies or a home business some extra room separate from the main living areas may be the most important quality in a home. Gardeners want large lots like a painter wants a big canvas. Other people hate gardening and would be better off with a condominium where they write a monthly check and someone else cuts the grass.