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Who would have thought that achieving the American Dream could be so stressful?
Buying your first home can be a competitive and anxiety-inducing experience. It’s crucial to be prepared for the highs and lows of the process. Here are some essential steps to consider when preparing to purchase a home.
Step #1: Assess your financial situation and save!
Take a close look at your financial situation, including your income, savings, and monthly expenses. Determine the amount you can comfortably afford for monthly mortgage payments. NerdWallet suggests following the 28% rule, which means your mortgage, PMI, insurance, and property taxes should not exceed 28% of your income.
Check your credit score: Obtain a free copy of your credit report from major credit bureaus like Equifax®, Experian®, or TransUnion®. A higher credit score increases your chances of securing a favorable mortgage rate.
Save for a down payment: While FHA loans offer down payment options as low as 3.5%, it’s wise to aim for a higher down payment, ideally around 20%, considering the competitiveness of the current housing market.
Step #2: Get pre-approved for a mortgage
Approach different lenders to get pre-approved for a mortgage. This requires providing necessary financial documentation, such as pay stubs, bank statements, and tax returns. Pre-approval provides a clearer idea of your borrowing capacity and helps you narrow down your search. Coldwell Banker works with a team of Mortgage Brokers who can assist you in this process and ensure a low-interest rate.
Step #3: Research neighborhoods
Explore various neighborhoods that match your lifestyle and preferences. Consider factors like safety, proximity to amenities (schools, shopping centers, parks), commuting distance, and future development plans. Visit neighborhoods at different times of the day to get a feel for the community.
Step #4: Find the right Real Estate Agent
Select a reputable real estate agent specializing in the local market. Look for someone with a solid track record, deep area knowledge, and excellent communication skills. If you’re searching for a home in Central Massachusetts, I believe I am that agent and would be delighted to assist you. Feel free to call my cell at 774-275-4035 or email me at mark.kotsopoulos@cbrealty.com. If you are interested in other areas of New England, I can refer you to the best agent in your desired location.
Your agent will guide you through the remaining steps:
Hunt for the right home: Realtors have access to the Multiple Listing Service (MLS), which includes all listed properties in the area. If Zillow hasn’t listed it yet, it will be on MLS, and in this market, the earlier a buyer is informed about a property, the better. Send your agent a description of what you’re looking for, including must-haves, and put him/her to work for you!
Review and negotiate the offer: Your realtor will help you determine a competitive offer and advocate for you during the negotiation process. This is a critical stage where thousands can be gained or lost, making the presence of the right realtor indispensable.
Attend closing: Closing day often brings mixed emotions for first-time homebuyers. On the one hand, it marks a milestone toward building generational wealth and a solid net worth. On the other hand, the down payment can significantly deplete savings. Your agent will explain the documents you’ll be signing and provide guidance to help ease the stress of the closing experience.
I want to stress the importance of finding the right agent. They will be your trusted companion throughout the process, helping you find suitable properties and negotiating on your behalf. Ensure that your agent is a REALTOR®, which means they possess real estate expertise and have a fiduciary responsibility to act in your best interest.
Good luck and happy househunting!
