1. Get Pre Approved!
You’ve already been told this, but it’s true. In today’s hyper-competitive market no seller will take you seriously unless they know you can close. Get pre-approved by a well-known, trustworthy lender, and a loan officer that is experienced, competent and ethical. Strong endorsements go a long way.
2. Develop a budget!
Say you fall in love with a home, only to find out you can’t afford it and end up heartbroken. Before you start browsing, it’s critical that you answer the important questions like, what is the most you can afford? What is your ideal price range? To help you get started, use our online mortgage calculator to determine the maximum monthly payment you can afford based on the price of the home after you put down a down payment and over a 30-year-mortgage.
3. Make a list of your non-negotiables.
What features are you not willing to part with? And what would make you miserable? From there, make a list of non-negotiables. Everything from location to square footage, to amenities — that you must have in your future home. This will aid your realtor in their home search. It is nice to know what you want in a home. However, it is generally tough to find everything you want in a house.
Searching online helps to figure out whats out there at a price that you can afford. This will allow you to reevaluate your list as you gain a better sense of what’s out there and what you want.
4. Make a Good Offer!
When you’re ready to make offers, don’t waste your time, your agent’s time and the seller’s time. Make serious offers. In today’s market, low-ball offers will rarely be successful. You don’t have to over-pay, but you do have to be serious.
Have your agent talk to the listing agent to learn about the seller. Many agents assume that a fast close or the highest price is most important. But sellers differ, and that may not be the most important thing to them. Their agents know them, so have your agent ask.
Don’t let multiple offers scare you off! It’s not always about the highest price. Tailor your offer based on what the seller wants most.
5.Don’t take any actions that will impact your buying power before or during the loan process.
Taking out a loan for a major purchase, opening a new credit account, maxing out a credit card….all of these actions can negatively impact your debt-to-income ratio (DTI), huge criteria in qualifying for home financing.
Your DTI is your recurring monthly debt divided by your monthly gross income. Most first-time homebuyers have no idea what their DTI is and, in turn, don’t know that it affects their buying power when looking for a home. Any extra costs, such as car payments, increase this number. The lower the number, the better.