6 Steps To Buying a Home

Getting ready to buy a house? Here are six steps to set you up for success.

Buying a home can be an exciting step and a huge accomplishment. It can also be a complicated process, especially for first-time buyers.

Fortunately, every buyer can take steps to prepare and gain an edge in a competitive market. By taking some time to organize your finances and learn about the process before you dive in, you may avoid common pitfalls that make the process harder—and more expensive—than it has to be.

First things first

Before you drop in to your first open house, start to get your financial house in order. At Harborstone, we recommend that you:

1. Check your credit score (and improve it if you need to): While you’re building savings for a down payment, work on your credit score. The higher your credit score, the better the interest rate you’ll get on what’s likely to be the largest purchase you’ll ever make.  

If your score isn’t stellar, there are things you can do to give it a boost. Some are quick; some might take more time.

• Order a credit report and check it for errors. You can get a free copy of your credit report at annualcreditreport.com. If you find errors, get them corrected as soon as possible.
• Pay off past-due accounts and keep other payments current. Late payments are the biggest factor that could negatively affect your credit score, and the later the payments, the more your credit score drops.
• Lower your debt-to-income ratio. In other words, pay off existing debt and keep your income rolling in. This ratio doesn’t directly impact your credit score, but lenders consider it when they’re deciding your mortgage options. They know that less existing debt equals more income available for your move and new house payment.

2. Choose a mortgage loan officer: The best mortgage lenders can be wonderful guides and resources during all stages of the homebuying process. They can help you compare mortgage options and current interest rates and determine a price range that you can afford comfortably without sacrificing your current lifestyle. Then get a quick prequalification (a general indication of whether you will qualify for a mortgage when you’re ready).    

3. Earmark money on hand for home-related expenses: The fact is, buying a home takes cash. Start budgeting and saving for closing costs and moving expenses. Work with your loan officer to determine how much you’ll need, and then keep it safely tucked away so it’s there when you’re ready.

4. Make your wish list: The fun part! Once you have a ballpark price range in mind, think about what you want and need in your new home. How many bedrooms, bathrooms, and workspaces do you need? House or townhome? Garage or street parking? Yard or shared community center? Town or country?

5. Find a real estate agent: Ask your loan officer, friends, and family for referrals. Check online reviews. Meet with candidates in person. This is an important relationship: A good agent can help you make smart decisions and avoid mistakes throughout your home search. Look for someone who listens to you, responds to your questions, and has a style that makes you comfortable. (Bonus for Harborstone members: As part of our Cash Rewards program, use a HOMEAdvantage agent when you buy or sell a home and save money when you close.)  

6. Start your search: Once you’re ready, your real estate agent will search for appropriate listings on your behalf and arrange showings. You can also look online, and if you’re staying local, drive through your favorite neighborhoods in search of “for sale” signs. Then ask your agent for an appointment if there’s a home you want to see. Caution: Don’t be discouraged if a home you really like doesn’t match your budget. Be patient and flexible, and you’ll find your dream home.

Learn more

Visit our Home Mortgage Loan resource and check out the Harborstone Homebuying Guide for more details about planning and preparing for your home purchase. You can also give us a call at 1-800-523-3641 with any questions you have about financing your new home.

Keep an eye out for our next first-time homebuyer webinar. More details to come.

Harborstone Credit Union’s Home Loan Department team is here to guide you; reach out anytime here: Home Loan – Harborstone Credit Union