10 THINGS YOU MUST DO BEFORE YOU BUY A HOUSE
So you’ve made the decision to buy a house and you are ready to go right? Not so fast… before you find yourself in a pickle check out the 10 things you need to do before you start your house hunting journey.
#1 KNOW YOUR CREDIT SCORE
This should be a no brainer, but you need to know how good or bad your credit score is. If you don’t know, you can get a free credit report from all 3 credit bureaus.
Most of the time your credit score needs to be at 580 or above to qualify for a home mortgage. So don’t get too excited just yet if you think you have a bad score.
#2 SHOP LENDERS
All mortgage lenders are not created equal. Do your research on some local lenders vs. online lenders and what the best fit for you may be. We prefer local lenders, because communication is usually better and we know we shouldn’t have any bumps along the way.
Whether you are thinking of going with your bank or an actual mortgage lending company, start making your list now. If you would like a recommendation on who to use, head on over to our homepage and click on get pre-approved. Our team only works with the best!
#3 GET YOUR PRE-APPROVAL
Once you have selected a lender to work with, go ahead and start the process to get your pre-approval from them. Filling out an application with our preferred lender should only take you about five minutes or so.
I can’t stress enough how important this step is before you start searching for a house. Getting a pre-approval will tell you how much house you can qualify for. How bad would it suck if you fell in love with a house that you can’t even qualify for? Don’t be that person. Plus, you will need it to submit an offer anyways.
#4 KNOW EVERY EXPENSE BEFORE BUYING
Before you decide on a house, you should know every expense that comes along with it. Not just your monthly payment.
You need to know expenses like HOA dues, utilities, and maintenance costs. These things can add up and you don’t want to end up house broke trying to keep up with the Jones’. Check out the video and article we released about the real costs of owning a home.
#5 KNOW YOUR BIG WHY & WHAT YOU WANT
Do you know your big why? Like WHY are you wanting to move into a new home? What is the primary motivating factor? Examples of this can be anything like; you’re tired of throwing money away renting, your family is growing and you need a bigger house, or you are now empty nesters with the kids off to college and you want to downsize.
Whatever the case is, knowing why you want to move will help you down the road if things get tough.
#6 FIND A REALTOR
Next up is finding a solid real estate agent in Houston to work with. Just like lenders, not all agents are created equal.
Our industry is loaded with part timers who only like to make a sale or two a year to pay for their vacations. Hire an agent that does this for a living, not someone who does this as a hobby or side hustle. Be sure to check out our video and blog we wrote on how to find the perfect real estate agent in Houston.
#7 WHAT ARE YOU COMFORTABLE PAYING MONTHLY?
I want to make a statement that most real estate agents won’t ever tell you… Just because you have been approved for a certain amount doesn’t mean you have to spend that much. If we find you the perfect house $50,000 under your budget, then go for that!
You know your finances better than anyone. Know what monthly payments you are comfortable with and don’t stretch yourself too thin.
#8 THE GROWTH OF YOUR INVESTMENT
One thing to consider when deciding on an area or property you want to purchase is the upside potential for growth. Try and choose an area where you know your asset (your house) will appreciate in value over time.
If you hire us as your agent or someone else, be sure to ask what the projections are like in the area and how values have changed over the years.
#9 FIXER UPPER OR MOVE IN READY?
Speaking of value, are you okay with a fixer upper or do you want something that is move in ready? With a fixer upper, you can get steep discounts and you have plenty of room for improvements. A great thing about buying fixer uppers in Houston is that you get to choose all the finishes and design the house like you were building a new construction. But, it does take a lot of work and time.
If you want a move in ready home, you will likely pay top market value for it. But the upside is that you don’t have to spend a dime on remodeling since it’s already done for you.
There isn’t a right or wrong answer here. It’s all preference really.
#10 SAVING FOR YOUR DOWN PAYMENT & DIFFERENT LOAN TYPES
When you decide to buy a house in the Houston area, you will need to have a down payment unless you are a veteran using your VA benefits. If you want to buy a house and don’t have any cash saved up, now is the time to start saving.
I won’t go into too much detail here, but I will list the most common loans and what the minimum down payment is for each. We will dive deeper in another article and break down each loan type at a later date.
The percentage of down payment is based off the purchase price.
Conventional Loan: 3% for first time home buyers, 5% for all other buyers
FHA Loan: 3.5%
VA Loan: 0% (But you do have to pay a VA funding fee)
Well, there you have it, the 10 things you need to do before you go house shopping. I hope this article was somewhat of value to you.
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