Buying a home is a big step, and it can be easy to forget to do something in the process. Many people want to jump right in and start looking at houses right away, but there are a lot of things to consider before you get to that point. REILLY, REALTORS® is here to help make the home buying process as smooth as possible, and our Austin REALTORS® can answer any questions you might have along the way and help you achieve your goals.
Here are 5 steps you should take before house hunting:
1. Find out your credit score. The most widely used credit score is the FICO® score, which can differ based on the 3 credit bureaus: Experian, Equifax, and TransUnion. Each bureau determines your score based on credit reports at that bureau, so not all of them will have the exact same information. Generally, there is no specific number that will indicate whether you're a good or bad person to lend to, but higher scores do tend to be looked at more favorably. There are a number of institutions that will provide your free credit score from at least one bureau, so it's a good idea to find out what your score is before you approach a lender so there aren't any surprises.
2. Get pre-approved for a loan. Before setting your heart on a home, it's a good idea to find out what you can actually afford. A lender will work with you to see how much you are eligible to borrow based on your credit report, pay stubs, and bank statements. Getting a letter of pre-approval can also give you a leg up when you are ready to make an offer on a home, showing the seller you are serious and ready to buy.
3. Determine a long-term budget. There are more than just monthly mortgage payments that make up the costs of owning a home; it's important to factor in property taxes, utilities, upkeep, and home warranties. Even before the purchase, buyers can be expected to pay several hundred dollars for thorough appraisal and inspection reports. Having money put aside for repairs and unexpected expenses is never a bad idea, especially when it comes to one of the largest purchases you'll make in your lifetime.
4. Decide what you want in a house. Your financing is set and you know your price range - now it's time to make a list of the top features you desire for your home. Are there any must-haves or things you absolutely don't want in the home? Now is the time to figure out where you picture yourself and if you can afford it, or if you have to make some adjustments to what your dream home looks like. Consider if building a home to your specifications is an option, too.
5. Research neighborhoods. It's better to find out if you can live in the neighborhood before falling in love with a home. Consider things like location (are you willing to live on a busy street? how far from work is reasonable?), surrounding areas, safety, and the overall feeling you get in the community. Many people consider school districts when choosing a neighborhood, while others are concerned about recreational activities in the area. Whatever your preference, our Austin Neighborhood Guide can help you find the right fit.
Looking to buy a home in Austin, TX? Contact us today for information and expert advice about Austin real estate.