Before You Buy

The very first thing you should do before you buy a house is go to a trusted lender - maybe your local bank or credit union - and get pre-approved for a mortgage. This will accomplish a number of things for you:

  1. You will establish what your spending level is. This can help immensely in the house-hunting process.
  2. You will be able to get a copy of your credit rating. Your lender will request this in order to pre-approve you. Be sure to get a copy of that credit file from them. You can use it for later when you will want to get other quotes. Note that you don't necessarily have to get other quotes now. Just be sure that you know how much you can potentially qualify for with at least one lender. Then you can start looking at houses while you continue to check out your best deal in a mortgage.
  3. Your pre-approval will give you an idea of the monthly payments that will be associated with your future mortgage. This is vital information.
  4. Your pre-approval may also include a 'locked in' interest rate. In times when rates are going up, getting an interest rate locked in can be very helpful and may save you a lot of money later.

Once you have been pre-approved consider what your monthly payments will be. Take a look at your spending patterns as well. Although you may have been approved for a mortgage of $150,000 you may find that you really don't want one that big because you don't want your payments that high. The time to think about this is BEFORE you buy. While a lender may consider you capable of handling a certain level of debt, you may want more "wiggle room" for emergencies. Take this into account and consider houses at a lower price point if you want to keep your mortgage lower.

Then, start the house hunting! As a buyer, you can get a real estate agent who can help you. In fact, you might want to work with more than one agent while you are initially house hunting. It costs you nothing as a buyer because the seller of the property pays for the real estate agent's services.

Almost every weekend the newspaper will list 'open houses', which will allow you to tour a property. It's worthwhile to attend a few of these in order to see how price in the housing market matches up to what you get. You can also go to new housing developments and see what a builder would offer you for the same price.

The more information you have about the housing market, the options and prices of homes, as well as your own purchasing power, the better you will be able to shop for your home.


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