Thinking About Buying a Home? 5 Questions to Ask and 4 Steps to Get Ready

Buying a home is one of the biggest decisions you’ll make, and the best purchases usually start long before the first showing. Whether you’re hoping to buy this year or a few years down the road, here’s how to tell if you’re ready and what to do now so you are.

Part 1: Are You Ready? 5 Questions to Ask Yourself

1. Are your finances in shape?

Are you managing your debt, and do you have money saved for a down payment and closing costs? If your financial house is in order, you’re in a strong position to buy.

2. How long do you plan to stay?

Buying and selling a home both come with costs, so it usually takes several years for a purchase to make more financial sense than renting. If you expect to stay put for a while, buying is more likely to pay off.

3. What will it really cost to own?

Your mortgage payment is only part of it. Add up property taxes, homeowners insurance, utilities and, for a condo, the monthly condo fee to get a true picture of what you’ll spend each month and each year.

4. What about future expenses?

Every home needs upkeep. A newer home may need less in the first few years than an older one, but either way, plan a budget for routine maintenance and the occasional surprise repair.

5. What’s happening in your market?

Are homes selling quickly with multiple offers, or is there more to choose from and room to negotiate? Conditions vary from town to town and even neighborhood to neighborhood. Give us a call and we’ll walk you through what’s happening where you want to buy.

Already own a home? If you have equity in your current home, you may have more options than you think. Depending on how much equity you have, your sale could cover a solid down payment on your next home, with some left over for updates.

Part 2: 4 Steps to Take Before You Start Your Home Search

1. Build a solid credit history.

For most people, a mortgage is the largest loan they’ll ever take on, and lenders want to know you’ll pay it back. A strong credit score can help you qualify for a lower interest rate and a lower monthly payment. To build it:

• Keep your existing credit accounts in good standing
• Pay down existing debt
• Be careful about opening new credit, especially in the months before you buy
• Check your credit reports regularly and make sure everything is correct. They’re free at AnnualCreditReport.com.

2. Save for a down payment.

The more you put down, the less you’ll need to borrow. Twenty percent is often seen as the ideal, but many buyers put down much less. Some loan programs allow as little as 3% to 3.5% down for buyers who qualify. Set money aside every payday, and put windfalls like tax refunds toward your savings.

3. Build your savings beyond the down payment.

You’ll also need money for closing costs, moving and any updates you want to make after you move in. Savings in the bank also show lenders you’re on solid footing, and give you a cushion for unexpected repairs.

4. Think about what you want in a home.

You may not be ready to buy yet, but you can start dreaming. What does your ideal home look like? What features matter most? Which towns or neighborhoods are on your list? Write it down. Knowing what you want will make your search faster and easier when the time comes.

Ready to Talk?

Whether you’re buying soon or just starting to plan, we’d love to answer your questions, talk through the local market and help you find the right home.

Home Selling Resources

Home Buying Resources