Working with a Realtor

You’ll be working closely with your real estate agent, so find an agent you get along and communicate well with. The right agent should be experienced, highly skilled, knowledgeable, and easy to reach. The earlier you engage with an agent the more they can help you navigate the entire home buying process

Know your financial comfort level.

Knowing what you can and are willing to spend starts you off on the right path. Get prequalified with a lender. Lenders can guide you through the anticipated cost before, during and after your home purchase. They will discuss available loan options and the cost associated with each one. What you can qualify for may not be what you are comfortable spending. Some lenders’ formulas will qualify you for a loan with payments that are 40% of your monthly income while most lenders and financial planners recommend no more than 28%. Purchase within your comfort level and don’t set yourself up to become house poor.

Practice paying your mortgage.

Whatever your lender tells you your monthly payment will be on the home you plan to purchase, start paying it now. For example, if your current housing payment is $2,000 a month and your pending mortgage will be $3,000 a month start saving the extra $1,000 a month. Not only will you have a practice run on adjusting your spending habits each month, you’ll be saving towards your down payment.

Don’t do anything to impact your pre-approval.

Your pre-approval is based on the information you provided your lender at that time. Changes, like a different job or a new car loan, can result in denial of the loan request when it’s time to purchase a home.

Know the hidden costs.

There are costs involved in the purchase of a home outside the price of the house. Familiarize yourself with upfront and ongoing cost. Loan costs and fees associated with the closing can be obtained from your lender, realtor and closing attorney. Be knowledgeable of ongoing costs such as property taxes, homeowner’s insurance, association fees, local fire department dues, and other related expenses. The fewer surprises you have the better.

Be ready but also be patient.

The perfect home may be the first one you see, or it may take patience. Be prepared to make an offer when the opportunity presents itself. A home purchase is a significant investment and requires preparation and research. The right Realtor will know the process, the market and can help you not miss your opportunity.