Throughout most of Wisconsin, the housing market is still strong. The summer months are active, interest rates are low, real estate prices are competitive.
Is now the time for you to take the plunge into home-ownership? If so, here are four tips for first-time home buyers. They will help smooth your transition from renter to owner.
#1: Prep work is important.
Get your finances in order before you even start looking at listings. There is some fierce competition out there. Being pre-approved for financing gives YOU the edge.
To start, review your credit score and clear up any errors you find. Second, go to your bank and get pre-approved for the largest mortgage loan you can. Loan pre-approval is a free service at most banks. Pre-approval boosts your credibility. It shows you are serious about buying and you have the ability to pay for it. Want a faster process of applying for your mortgage? Get preapproved. Getting the loan from the same bank that pre-approved you for credit will also speed up the process.
#2: Don't budge on your budget.
Buying a house might be the largest purchase you ever make. Making and sticking to an accurate, realistic budget is essential.
First, look at the amount of cash you have in your checking and/or savings account. Determine how much of that you'll use as a down payment (leave some as an emergency fund!).
Next, learn how much the houses you're looking at will cost. Factor in all expenses. Include closing costs, principal and interest mortgage payments, taxes, insurance, utilities, commuting, etc.
#3: Build a trustworthy team.
Assembling a team that you trust in the next key to success. The real estate process is complex. Having experts on your side who look out for your best interests will give you peace of mind. Find a real estate agent and a mortgage lender you get along with and trust to give you good advice. Often, if you find one, they'll recommend the other. Professionals in these fields work with one another quite often.
#4: Don't sign until you've read
Closing on a house can be an emotional, nerve-wracking process. But, it is critical that you take the time to understand the document you're signing your name to. Read everything. If you don't understand something, ask your lender or real estate agent to explain it. Buyers have many different options for mortgages. From the standard fixed-rate 30-year loan to a 10 or 15-year variable rate, and other more complex options. No matter what your financial situation is, ask as many questions as you need to understand what you're committing to.