If you’re making the (difficult) decision on whether or not it’s right time for you to buy a house and have decided it is, first off, congratulations! What an exciting time for anyone in their life. It also happens to just be a chaotic time in the world due to the rapid spread of the novel coronavirus, though, making buying a house in 2020 different than buying a house in any other year.
Here are steps to take once you’ve made the decision and know that you have your finances in order to afford a monthly mortgage and a down payment.
- Decide if you’re ready or not. Obviously, this is the most important first step! It’s one thing to want to buy a house but it’s a whole other to be aware of if you’re actually financially and otherwise ready. The lender you’re getting a loan from will want to see your credit score and your employment history to ensure that you’re going to be a reliable borrower. They’ll also look at your existing debt to see if you’ll be able to take on additional debt through a mortgage.
- Calculate what you can afford. Again, all of the most responsible financial decisions are made once you calculate what you can and cannot afford. By doing so, you’ll be able to have an accurate budget and can cap your search at a realistic amount.
- Save money for the down payment and fees. When you go to buy a house, you pay a large chunk upfront in a down payment. You’ll want to save and apply to various loan programs to determine what percentage makes the most sense for you.
- Get preapproved for a mortgage. When you decide you want to purchase a house, you can apply to be preapproved for your mortgage. What this means is that you’ll find out what your mortgage will be based on your credit score, assets, and income.
- Find a good real estate agent to work with. In doing this process, you’ll want to make sure you’re working with a real estate agent that you trust. They’ll be your representation throughout the process, so you want to make sure they’re accurately representing your voice and needs. The agent will show you the different properties, help you write an offer letter, and assist you with any pricing negotiations. If you don’t trust this individual then the entire process will be flawed from the get-go.