Realtor.com experts stress that potential homebuyers should not go into the housing market unprepared. With interest rates hitting all-time lows, many renters are considering making the leap to homeownership, but before they start looking at properties and applying for mortgages, real estate professionals ask that they consider eight different factors.
The first item on the Realtor checklist is finances. Fidelity Investments Senior Vice President Kristen Robinson stresses that those who have not looked at their finances to see if they can afford everything that comes with homeownership may want to wait. The second item is to get a credit report, as potential buyers need to know their credit score.
While there are a number of programs that require little or even no down payment, buyers are still going to need to have some cash on hand. Conventional mortgages may require anywhere from five to 20 percent of the total price of the home as a down payment, and for some, that’s a sizable amount.
The remainder of the Realtor checklist includes:
- Learn about the mortgage process by attending a home-buying seminar or speaking with an expert.
- Find a real estate agent. Many suggest talking to at least three agents before selecting one.
- Learn about the various mortgage options available and find a potential lender.
- Estimate closing costs. In many cases, the buyer may have to pay between three and six percent of the total purchase price.
- Finally, experts advise homebuyers to consider the future, including what will happen to their property if they lose their income.
Moneytips can help you refinance your existing home loan.