I have a lot of people asking me how to best prepare for a home purchase in the next year or two.
How much should you save for a down payment?
My recommendation for a down payment: 5-10% minimum, try for 20% or more if possible.
What should you do before actually starting to house hunt?
- Save, save, save that down payment.
- Keep paying any bills and/or credit on time. This includes car loans, student loans, credit cards, even cell phone bills. With the changes going on in the financing industry, keeping your credit score as high as possible will allow you to qualify for the best interest rate available and will make it possible for you to qualify for financing that those with poorer credit cannot qualify for.
- Determine whether buying or renting makes the most sense. Start to get a feel for what home values are. What can you buy for $x per month? What can you rent for $x per month? You should be able to get a ballpark idea of home values by browsing the local MLS site online. If you know you will not be in the area for at least a few years, continuing to rent and to save for a future purchase may make the most sense. If you are ready to set roots and make the community your home for a while (5-10 years+), buying a home can have its advantages over renting.
A few more things when you start to look:
Since Sellers usually have professional representation, I believe a Buyer should also, to level the playing field and possibly even to give them an advantage in negotiations. A Buyer's Agent can give you information on market trends, home values, help you with loan shopping, etc. Their job isn't to "sell" you any particular home, but to make sure you are protected and aware of all your options as you try and buy the best home you can at a price and terms most favorable to you, the Buyer, NOT the Seller. Before you do anything else, try and find a reputable Buyer's Agent who you can trust to work in your best interest and guide you through the homebuying process. You can contact us here at The Don Miller Group and speak to one of our trained Buyer's Agents to ask any questions you have about the buying process.
When do we start getting serious?
The time to start getting serious is when you are about 90 days from wanting to be in your new home. This gives you time to go physically through a fair number of available properties and negotiate an agreeable contract on a home. This allows time for the buying process to take place and where you will finish all your financing arrangements, do your home inspections and other professional evaluations of the property. You will want to have inspections and evaluations done as early as possible in the process in case you need to renegotiate the agreement based on home conditions or in case you need to move on and find another property.
There is nothing wrong with doing some preliminary research prior to the 90 day mark. But when you start to get close, that is when you want to engage professionals to help you with your searching, financing and other preparations.
If you have any additional questions on this topic, please don't hesitate to call, text or email me.
Best of luck as you prepare for homeownership!
- Do you have excellent credit?
- Are you looking to purchase a home within 90 days?
- Are you making a substantial down payment (5% of the purchase price or more) or paying cash for your next home?
If so, don't buy a home without an agent on YOUR side of the transaction!
For more information on how my team of professionals can help your dream of home ownership come true, give us a call today
The Don Miller Group, Century 21 Executives Realty Ltd .......your real estate professionals for life.........