1. Determine your budget
Determining your budget is essential when looking for a home. You need to be able to tell your realtor exactly what you are looking for. Knowing your budget will help your agent search for your perfect home. It is recommended that your monthly mortgage not exceed 30-35% of your net (take home) income.
2. Save for your closing cost
Many home buyers are unaware of closing fees so they don’t include them in their budget. The average closing cost is 3-4% of your home. Check with your lender to see exactly what you need.
3. Research neighborhoods that are a good fit for you
Every neighborhood is different, and you want to make sure your new community fits you. You need to know all the details of the community. Is there a home owner’s association? Is crime a major issue? If you have kids, are there good schools in the area? Can you park your car on the street? These are all basic questions that you should ask yourself before moving into your new home. You don’t want to purchase a half million-dollar home only to realize your pet peacock isn’t allowed.
4. Attend a few open houses
Attending open houses allows you to become familiar with the home buying process. It’s also a great way to meet realtors and people from the community that you may be moving to. Try to attend as many open houses as possible when searching for your home.
5. Get preapproved for a home loan
Preapproval for a home loan will make your home buying search easier. It’s difficult to search for a home when you do not know if your lender will help you purchase the home. Make sure you have enough money saved up for your down payment. There are options these days that are as low as 3.5%. The name of the game is preparation and you need to have your ducks in a row before making an offer.
Being preapproved is an essential step and should be done before you start looking at homes. It sends the message that you’re a serious buyer to sellers. Before you can submit an offer you typically must have a preapproval, meaning you could miss out on "the one" if you wait until after you begin your search. Your realtor should be able to refer you to a lender if you haven't identified one yet.