Do’s and Dont’s

The home buying process is exciting, but there’s a lot to think about before it’s a done deal. Knowing what to do (and what not to) will make the process as smooth as possible.
Here’s what you should do:
Get Pre-Approved for a Mortgage
Getting approved for a mortgage before you buy a home makes it easier to negotiate pricing. It also helps you set a price range and puts buying a home in the broader context of your overall financial plans.
Shop for Lenders
Ideally, a lender will help you find a mortgage that’s right for you, which takes into account your financial goals and lifestyle. Lenders who do all of their own paperwork in-house, including underwriting, are more likely to meet deadlines and provide better customer service.
Calculate Costs
Owning a home can be expensive, and there’s nothing worse than feeling like you’re struggling to pay off a purchase. Ideally, your total housing expenses should account for 50 percent or less of your total monthly income.
As you’re working towards becoming a financially-savvy and well-prepared homeowner, there are some pitfalls to look out for, too:
Don’t Fall for Low Interest Rates
At first glance, low interest rates on mortgages are enticing. However, they can easily be offset by lenders tacking on hidden or unexpected fees. Lower interest rates do occasionally work in your favor, but usually only if you live in your house for a long time (20 years or more).
Don’t Forget the Closing Fees
Closing costs are home ownership fees that you pay in the closing phase of a home sale, which is when the home’s title is transferred from the seller to the buyer. Closing fees include taxes, origination fees, and settlement fees. In total, they add about two to seven percent to a home purchase. On a $300,000 home, for example, closing fees can range from $6,000 to $21,000.

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