If you’re thinking of purchasing a house, there are some essential steps to take before the process starts. One of these is getting preapproved for a mortgage loan.
Being preapproved can make the home shopping process a lot smoother. In fact, it could even increase your chances of finding and purchasing a property you love.
Aside from knowing your budget for a new home, getting preapproved can also give you leverage when making offers on properties.
Prior to Searching for a Home
Be sure to save enough for a down payment and create an individual budget so you can shop with assurance, knowing what price range each house falls within. That way, you won’t get too excited by a house that’s out of your price range!
NerdWallet’s home affordability calculator can help you determine how much you can afford to spend based on your income, debt, down payment and credit score. It may take some effort, but it will give you an idea of your budget so that when you find the ideal home for you, you are prepared for what to pay.
Create a List of Your Must-Haves and Wishes
Once you’ve made a list of homes that interest you, prioritize which features are essential for you. For instance, if the backyard is two stories with room for sports equipment or pets, consider whether it is large enough for both.
Be wary of houses that require major renovations, particularly if you’re searching for a single-family home in high demand. These kinds of properties can be costly if you can’t do the renovations yourself.
Ask Your Real Estate Agent to Assist With This
When looking for a new home, having the expertise of an experienced real estate agent is key. They’ll be able to tell you if the location is suitable for your family, what amenities are in the neighborhood and how best to negotiate with sellers.
Finally, a real estate agent can assist you with the process of securing a mortgage loan and making an offer on the house you have found. Having someone knowledgeable by your side makes the entire home-buying experience less stressful and more enjoyable; they will guide you through each step along the way.
Maintain Flexibility and Prepare For Changes
Receiving preapproval for a mortgage loan is an essential first step on the path to home ownership. But before you can final approval from the lender, they’ll need additional financial documentation such as recent paystubs, bank statements or tax returns, which may necessitate paying out-of-pocket for certain costs. To get everything ready, stay flexible and prepare yourself financially for changes that may arise along the way.
Maintaining control over your finances and avoiding job changes or closing open accounts are also recommended to maintain a healthy credit score. Any of these actions could negatively affect your credit rating.