When you choose to buy a home versus renting from another property owner, you have the opportunity to invest in your future and build some equity. But before you begin shopping for a home, there are some items you need to consider with the purchase process. Here are some recommendations for you to use during the home buying process to make the process easier.
Plan for Financing
The means you use to buy your home may consist of some form of cash along with a big portion of financing, depending on your financial situation. However, no matter the way you plan to pay for your home, you need to plan on preparing for a down payment and some earnest money for a start. The earnest money is a small amount, which you put into an escrow account toward a home's purchase when you submit an offer to purchase a home. The seller of the home is made aware of any earnest money, which is non-refundable to you in certain situations. If you forfeit your earnest money it can go to the home sellers in the situation.
You will also need to consider your credit if you will seek out bank financing. Have a good idea of your credit history and score to help you know what to expect for the mortgage approval process. If you have not done so already, talk to a mortgage broker and find out your financing options based on your credit and income. Your mortgage broker can help you plan for a pre-approval limit on your financing and to know what to expect to pay for your loan's down payment requirements.
Choose Between New or Existing
One of the first decisions you will need to make in the home-buying process is whether you will buy an existing home or build a new structure. Depending on the area you live in, the economy, and the availability of new home construction, you might find it more economical to build a new property. And on the other hand, if home costs are higher right now, you might want to look at buying an existing home that you can get at a more affordable price.
For example, an existing home that is older can go for a less expensive price. Or, if you want to buy a home that needs a great deal of work that you can complete on your own time, the home's lower price can help facilitate you into buying a home.
For more information about single-family homes in your area, contact a real estate agent.