Looking for a single-family home for sale can be stressful. It doesn't have to be, however. With a few simple tips, you can buy a house in 2020 like a pro.
1. Work on your credit score.
You must know your credit score before you buy a house. You can talk to your mortgage lender about your score, use a credit monitoring service online, or even obtain a free copy here. Your credit score should be at least a 500 for an FHA loan. Conventional mortgages require a higher score of at least 620, but preferably 750 or more.
If your score is low, pay off old debt or pay down current debt in order to raise your score. If you notice inaccuracies on your credit report, report them to each credit reporting agency.
2. Get pre-approved.
There is a difference between pre-qualified and pre-approved. Pre-qualified is based on unverified information. It is typically not useful when you are house hunting.
Pre-approved means that you have taken the time to turn in documentation to your mortgage lender and have been through much of the underwriting process ahead of time. In other words, you are ready. You just need to get the bank to okay the house once you find it.
3. Hire a real estate agent.
Buying a house is the largest financial transaction that most people go through in their lives. Don't go it alone. Find a real estate agent that is qualified, that is experienced in your area, and that you feel comfortable communicating with. It is their job to guide you through not just the house-hunting process, but also through the multiple steps that happen after you make an offer.
Also, as a buyer, it can cost nothing to work with a licensed buyer's agent. The seller pays the fee for their commission out of the proceeds from the sale of their home.
4. Be comfortable with the monthly payment.
Quite often, a banker or mortgage professional will approve you for a monthly payment that, while doable, is not necessarily within your comfort zone. You do not have to spend that much. If you are more comfortable at a certain monthly payment, then ask your mortgage agent where you need to be with the offer and do not buy a home beyond that price point.
It can be tempting to spend every last penny that you are pre-approved for, but don't feel pressured to do so. You need to be comfortable with the monthly payment or you will never be able to relax in your new home. It is more than okay to live below your means.
5. Ignore the crazy paint and wallpaper.
Everyone has different tastes in design. Some of the homes you look at may have crazy floral wallpaper or vivid purple walls. Ignore it. Look past the decor and focus on the size of the rooms.
You can easily paint over the crazy color choices in a weekend or two and put your own stamp on the house. Do not let it discourage you from making an offer. Every house has imperfections, and paint is one of the easier ones to resolve.
6. Know that an inspection report is not a shopping list.
Speaking of imperfections, many buyers get confused when they receive their inspection report. The report is designed to advise you of future repairs and any safety issues. You want to have a professional take a look at the roof and let you know that you probably have another several years of life in the shingles. This information helps you plan for future upgrades and replacements.
It is not a shopping list, however, of things that you want the sellers to buy for you. Every house has minor things wrong with it. You want to use an inspection report to inform you about the major stuff.
Buying a house can be a smooth and pleasant transaction if you keep these tips in mind. Learn more about single-family homes for sale near you by talking to a real estate agent.