5 things to do before you start looking for a new home


If you'd like to buy a house, you may think your first step should be driving by homes you're interested in or visiting an open house. But the home buying process should start before you ever look at a single home.

That way, you'll be in the best possible financial position to get a mortgage loan and will have a better idea of what home features are most important to you.

»RELATED: 6 common first-time homebuyer mistakes that could cost you big time

Take the following five steps before you start looking for a new home:

Check your credit.

Your credit score and history help determine how easily you can get a mortgage and what rate you'll pay. The difference between mediocre and excellent credit can make you pay or save thousands of extra dollars in interest over the life of your mortgage, according to consumer adviser Clark Howard.

He suggests checking your credit score and history on myFICO.comAnnualCreditReport.com or CreditKarma.com. Look for any errors on your report and take steps to correct them. If your credit is less than ideal, make sure to pay every bill on time each month, reduce your credit card balances and ideally pay them off in full each month.

Save for a down payment.

The most desirable down payment is 20 percent of your home loan, but this isn't required in all cases. However, if you can come up with this amount, you'll probably qualify for a lower interest rate. In addition, you'll need to borrow less money, so this will further lower your monthly payment.

Particularly if you're a first-time home buyer, saving for a down payment can be challenging since you don't have equity in another home. These tips can help make it easier for you to save.

»RELATED: 9 ways to save for a down payment on a home

Get pre-approved for a mortgage loan.

Investopedia says that consulting with a mortgage lender and getting pre-approved for a loan is an important early step in the house hunting process. Your lender will check your credit and discuss loan options with you. You'll find out how much money you can borrow, but you should also be aware that going for the biggest loan you can qualify for may not be the best choice for you. You may find your budget stretched too thin and may resent it if you have to give up weekly date nights or yearly vacations.

Armed with a pre-approval letter, you'll be able to know which homes you can afford, avoiding the frustration of falling in love with a home only to find out it's out of your price range. This letter can also strengthen your bargaining position with home sellers since it proves that you're a serious buyer who can obtain financing.

Make a 'must' vs. 'lust' list.

You'll have to make a distinction between "must" and "lust" before you start house hunting, Houselogic.com advises. In other words, you should make a list of what you'd like to have in your new home and what's non-negotiable. Make a list of wants and ask your partner to do the same. Put them in order of importance and look for anything that overlaps on both of your lists. By making a list before you start to house hunt, you'll save your time as well as your agent’s. since he or she should only show you homes that fit your "must-have" list and also contain some of your "would be nice to have" items.

Take a closer look at your lists and consider what can be easily changed and what can't. For example, square footage is hard to change, and so are the number of bedrooms. These items should have a higher priority than, for example, the color of the walls, since this can be changed more easily.

Choose the right real estate agent.

A real estate agent can help you find a home more quickly, since he or she should have knowledge of the home buying process as well as homes in your area and can help show you homes that meet your criteria. You should also be comfortable with your agent, so you can feel free to express any concerns or suggestions you may have and ask questions.

Bankrate.com suggests following seven steps to find a great real estate agent, from talking with recent clients to gauging his or her knowledge of the area.


Reader Comments ...


Next Up in Business

Kroger finalizes merger with Home Chef meal delivery company
Kroger finalizes merger with Home Chef meal delivery company

The Kroger Co. finalized a merger with meal delivery company Home Chef this week as the Cincinnati-based company seeks to speed up growth in the meal kit market. Home Chef will operate as a Kroger subsidiary and will assume responsibility for the grocer’s meal kit initiatives. Home Chef meal kits will now be featured in Kroger’s portfolio...
Dream job alert: Ohio’s first Legoland Discovery Center hiring 40 people
Dream job alert: Ohio’s first Legoland Discovery Center hiring 40 people

Ohio’s first Legoland Discovery Center is looking for 40 full-time and part-time employees in a July hiring push. Open interviews at the indoor playground’s job fair will be July 13 to 15. The company is looking for experience in food and beverage, retail, admissions and custodial roles, according to a release. Legoland will open Sept....
Recalls: Ladders and scarves 
Recalls: Ladders and scarves 

Dangerous ladders and women’s scarves are on this week’s list of recalled products from the Consumer Product Safety Commission. One person has reportedly been hurt in a fall from a broken Werner Multipurpose Telescoping Aluminum ladder.  There are five models with the following model numbers, date codes, and sizes, under recall: ...
Fifth Third Bank to lay off undisclosed number of employees
Fifth Third Bank to lay off undisclosed number of employees

Fifth Third Bancorp is cutting jobs in the region, bank officials are telling the media. The company is not discussing the number of employee layoffs or how many are happening in the Dayton area. No notice of layoffs appeared on the state’s “WARN” (Worker Adjustment and Retraining Notice Act) notice board as of early Friday. Typically...
Documenting growth: O’Neil seeks up to 100 new workers
Documenting growth: O’Neil seeks up to 100 new workers

A year ago, Hernan Olivas was several months into his new role as chief executive of technical documentation and engineering firm O’Neil & Associates. After the unexpected passing of his predecessor, Robert Heilman, Olivas saw his mandate pretty clearly: Raise the revenue bar. Explore revenue possibilities locally, including at Wright-Patterson...
More Stories