From the time the decision is made to purchase a home, there’s often a rush to start looking at homes and putting in offers. However, prospective homeowners should have a few things already done before they rush into this step. Some of the things to do before putting in an offer on a home include the following.
An Idea of What is Desired
Think about what’s wanted in a home. Should it be one story or two? How many bedrooms and bathrooms are needed? Is a large yard important or would a smaller one be better? It’s a good idea to write down a list of things that are needed in the home, things that are desired, and things to avoid. This will make it easier when looking at homes to find one that’s perfect.
Thorough Understanding of Current Budget
Write down how much money comes in each month and how much is spent. Where does the money go? Use this to create a budget and stick with it for a few months. Adjust the budget as needed to determine how much is spent on housing as well as utilities, food, entertainment, and more. If the housing part of the budget isn’t sufficient to cover a mortgage, see what can be changed, if anything, and make sure there is enough money in the budget for the mortgage.
Down Payment in Savings
Well ahead of time, start saving up for a down payment. Conventionally, the down payment should be at least 20% of the purchase price of the home. Use the previous budget to determine the amount of money that can be spent on a home using online mortgage calculators, then determine the down payment needed to get a mortgage and purchase a home. Make sure there is extra money to cover closing costs, anything the house may need before moving in, and emergency repairs within the first year.
Information About Credit Score
Check credit scores for anyone who will be on the mortgage and make sure they are good. If a credit score is low, there are things that can be done to help raise it. It’s best to start working on this as early as possible, as it can take time for a credit score to improve. Lower credit scores mean a chance of being rejected for a mortgage or getting a higher interest rate, so it’s best to have as high of a credit score as possible.
Pre-Approval From a Lender
Before looking for homes, talk to a lender and get a pre-approval. This provides information about the overall amount that can be spent on a home and shows sellers that the buyer is ready to purchase. This can make it easier to put in an offer and have it accepted.
If you’re ready to buy a home, use these tips to make sure everything is lined up and you’re ready to start looking at homes. If you don’t have a pre-approval yet, look into working with a lender for a home loan in Singapore so you can start looking and find the perfect home.
Infographic provided by Marketplace Homes, a realtor company.