Home ownership is a big step – and it can be scary. Use this checklist to make sure you are ready.
____ Get a copy of your credit report and look it over carefully. Take care of any problems you see.
____ Use a mortgage calculator to determine exactly what you can afford and don’t look at houses above that amount. (Don’t forget to allow room for any fees that may make your mortgage higher – some lending companies are now adding fees based on your credit profile.)
____ You have a good-sized down payment set aside. If you don’t, put off buying a home until you have one. You’ll want a down payment of about 20 percent of the cost of the home. If you don’t have at least that much, consider renting an apartment until you have the down payment saved.
____ In addition to the down payment, you have money set aside for moving expenses, a home inspection, and closing costs.
____ Make sure you want to stay in the home for at least several years. If you want to move soon or your career involves a lot of moving around, buying may not be the best idea for you right now.
____ Get pre-approved now – before you start looking. This will solidify your price range. If your pre-approval is more than you decided you can afford, don't let that sway you into looking at more expensive houses – even if you can make the monthly payment, you may have to sacrifice your way of life (movies, vacations, concerts, etc.) to live in that more expensive home.
____ Determine where you want to live, then check out the schools, the neighborhood, and the lifestyle. Visit the neighborhoods you are interested in at various times during the day. How is the rush-hour traffic? Can you get in to and out of the neighborhood easily? Is the neighborhood quiet or noisy? Are there a lot of children out playing in the afternoon? Are there sidewalks? Do the neighbors seem friendly? How far is it to the nearest store, gas station, bank, or whatever else you consider important? Consider the surrounding area, as well – location really is important, especially when you decide to sell.
____ Look for the hidden expenses. As you look around, you may notice a few "extras" you hadn't considered: homeowner's association fees, renovation expenses, property taxes, home maintenance, decorating and furniture, and other items that may cost you, such as lawn care and pool maintenance.
____ Decide what is most important in your new home. Make a list of the features you must have: A big yard for the dog. Plenty of closet space. A large, open kitchen. A master on the main floor. A large laundry room. A two-car garage. You may find a house you love but it is missing one key feature on your list. Think about day-to-day life: how much will that lack of closet space bother you? Will you be able to spend time cooking in that cramped, dark kitchen? That house may not be as charming when you can't fit your car and the lawn mower into the tiny, cramped garage.
Once you've checked off everything on the list, you are ready to start looking for a house! Consider keeping this checklist with you as you begin to look at houses. Your realtor may try to talk you into a home that is a little more than you want to spend, or you may fall head-over-heels in love with a house that you can't afford or isn't the right fit for you. If
that happens, a quick glance at the checklist will bring you back to reality:
* Can I really afford this house?
* Is this house worth the asking price?
* Is this the neighborhood/area I want to live in for the next several years?
* What don't I like about this house, and how much will those things bother me?
* What unexpected expenses does this house bring?
* Does it have everything on my must-have list?
* How much remodeling/repair work will I have to do?
Knowing the answers to all of those questions will alleviate the stress that inevitably comes along with buying a home. Happy house hunting!