Buying a home for the first time feels overwhelming for many people. The good news is that the process is manageable when you break it down into small steps. For example, be sure to request a copy of your credit bureau report when you first decide to purchase a home. This gives you the opportunity to review it and correct any errors that might work against you when you apply for financing. The time before you officially start looking at homes is also ideal for gathering documents such as bank statements, pay stubs, and tax returns that you will need later.
Apply for a Pre-Approved Loan
Once you are certain your credit report is accurate and you have adequate proof of your income, it’s time to approach mortgage lenders to request pre-approval. The best place to start is with your own bank. You stand a better chance of being approved if you already have a checking, savings, credit, or investment account in good standing. The benefit of pre-approval is that you know your home buying budget when it comes time to put an offer on a house.
Negotiate with the Seller
A general rule of thumb in real estate is to make your offer approximately five percent less than what the seller is asking. This gives you room to negotiate the final price. However, you may want to make a higher offer if it appears several other people will bid on the house as well.
It’s always a good idea to take advantage of first-time homeowner resources, such as seminars put on by local real estate agents. These events leave plenty of time to ask questions so you feel comfortable about your next steps.