class="s4">Once you’re settled in your current place and ready to start planning, you first need to take an honest look at your budget. Calculate your current income and debts. Have a separate sheet for everyday living expenses and a sheet for estimating new costs. This can help you determine what you can afford and what level of mortgage payment, property taxes, home warranty payment, and utility bills you should expect.

You must also know your credit score and what you can afford for a downpayment. Most conventional home loans can require anywhere from 5% down to 20%, so you want to know the price range you’re looking at. You want a minimum credit score of 620 for decent loan terms and interest rates.

Research Lenders

Qualification requirements will be different between lenders, and some may be able to offer you better terms than others. Researching and comparing multiple lenders is important to find the best one for your budget and financial situation.

One suggestion is to work with a mortgage broker to find the right conventional loan. These financial experts are very in tune with the current financial market around home purchases and can work with local lenders to find you several great offers for a loan.

Get Pre-Approved

You’re not likely to be taken seriously as a home buyer if you aren’t pre-approved. With the housing market as hot as it is, sellers aren’t willing to risk the deal falling through if you can’t get approved for the amount you offered. And most real estate agents won’t let you put in an offer without a pre-approval letter in hand— if they’re even willing to tour listings with you.

Pre-approval is an integral step in showing your commitment to purchase and how much the lender is willing to offer.

Know The Difference Between What the Lender Offers And What You Can Realistically Afford

It can be tempting to expand your price range based on how much the lender is willing to loan but don’t fall into this trap. You need to remember the rest of your budget and expenses. so you know what you can realistically afford per month to avoid defaulting on your mortgage loan.

Utilize Real Estate Tools

Real estate websites like Zillow and Trulia give you an in-depth look at potential homes, including school quality, neighborhood quirks, and mortgage payment and property tax estimations based on the listing price.

You can also take a basic look at photos before taking the time to tour a property and get information like how old the roof is and what types of appliances come with the purchase. This can help you plan for major expenses like future home repairs or furnishing costs for the new digs.

List Out Preferences And Deal Breakers

You can save yourself and your real estate agent a lot of time by laying out your must-haves, like-to-haves, rather-nots, and can’t-stands. If that reads like gibberish, think of this: how many rooms do you have to have? Do you need a fence? Will the presence of a school down the block encourage or discourage your purchase?

You want to create a list of potential properties so that your real estate agent can show you listings that will meet your needs and that you’re interested in. Your preferences and dislikes are unique to you. If you have roommates or family moving with you, don’t forget to include their input and only include things you can agree on.

Realize That This Is Just The Beginning

Everyone dreams of finding that perfect luxury home where they can spend the remainder of their days. Odds are, your dream home isn’t on the market— at least, not at a cost you can currently afford. Instead, find a home with most of your preferences and as few dislikes as possible.

By keeping a realistic picture of finances, you can include a savings goal in your budget to save for future renovations. Please don’t wait for your dream home; find your starting point and plan how to create it.