5 Things To Do Before Buying a House

Whether this is going to be your first house, or you’ve been through the process before, be aware that there are some things that can negatively impact your credit scores at the worst possible time, like cosigning on a student loan. It’s imperative to crunch all the numbers to get a solid idea of how the purchase will affect your monthly budget. Additionally, keep in mind that working with a real estate agent who knows the local market can make a huge difference. 

Remember to vet lenders too. Finally, spend time researching the market to learn what’s available, what the current price ranges are, and what you can afford. Review the essential pre-buying steps before moving forward.

Study Your Target Market

Head to your favorite internet real estate websites and delve into the market that interests you most. Focus on homes in your price range that include must-have features. Screen potential candidates by age, asking price, time on the market, square footage, special financing arrangements, property tax rates, neighborhood crime statistics, nearby shopping, proximity to main highways, and any other factors that are important for you.

Pause Before Cosigning on a Student Loan

Even before getting serious about shopping for real estate, most house hunters wonder will cosigning a student loan affect me buying a house? The question is a pertinent one because when you cosign for any loan, the obligation shows up on your credit report and can have a substantial impact on scores. That makes it difficult for parents and other adults who want to help youngsters who have few financial resources but wish to attend college.

Keep in mind that while you might want to say yes, being a cosigner might be an unwise move. Not only could the arrangement limit your borrowing power on a mortgage loan, but it could affect your financial situation in other ways. Review resources that explain everything you should know about how cosigning a college loan application can make it more difficult to finance a new home.

Crunch the Numbers

Make a two-year prospective budget based on the home purchase. The exercise can be quite revealing and educational because it shows how affordable a house can be in most situations, depending, of course, on the price, interest rate, repair expenses, and closing costs. There’s no need to be a financial guru to create a budget. Make estimates for any amounts you’re not sure of and take the time to be thorough. Don’t be surprised if the budget making process gives you a clearer idea about how much house you can afford.

Save for a Down Payment

When calculating how much money will be required at signing, include not only the down payment but also closing costs and any signing day fees. Ask the lender and your real estate agent to supply this information. The goal is to avoid unpleasant surprises when you’re almost to the point of acquiring the keys to the new property. 

Plan far in advance to save enough cash to cover the typical down payment amount of 20% of the purchase price. Note that most lenders will allow for less than that if you have good credit. Plus, some properties come with unique financing arrangements that don’t require the standard 20% down.

Vet Lenders and Real Estate Agents Carefully

Devote time to finding an experienced, reputable real estate agent. Do the same for lenders. If possible, get a personal referral from someone you know and trust who recently purchased a home. 

Once you’re able to narrow the choices down to two or three prospective candidates among lenders and agents, consider testing their responsiveness by placing a phone call or sending an email inquiry. Make a note of how quickly each one responds, how they answer, and what kind of information they provide. Professionals who respond quickly to inquiries are more likely to be helpful through the buying process.