Are you looking to buy a house in Southern Maryland but aren’t sure where to begin? Purchasing a home is one of the largest transactions you’ll conduct, and it can be stressful and overwhelming if you don’t know what to expect. The better prepared you are, the easier the transaction will be. Here are some tips to streamline the process of buying a home:

Credit is Important

Most people will need a home loan to buy their first property. Lenders have certain requirements that need to be met to be approved for a mortgage, the most important of which is that you have a clean credit history. If you’re not sure of your credit standing, you’ll want to request your credit reports from all three credit bureaus. Reviewing information from only one of the credit bureaus may not give you an accurate picture, as the other two might contain delinquencies you’re not aware of. Go over the credit reports closely and verify that they accurately depict your credit history. If you find any discrepancies, report them to the credit bureau and ask that they be removed. Most lenders require a fairly high credit score to get approved, so if you need a boost, see if there are any smaller debts that you can pay off to improve your rating. It’s best to be ahead of the game on this step, as the credit bureaus tend to take longer to reflect payments than they do to reflect delinquencies.

Define Your Budget

Being realistic on what you can afford is very important—don’t set yourself up for failure by settling on an unrealistic budget that you can’t afford. Compile a list of all of your monthly expenditures, including smaller expenses like eating out and entertainment, and compare that to your monthly income to determine exactly how much you can comfortably spend on a mortgage.  Also, make sure you consider potential property taxes, insurance, and HOA fees if you plan to buy something in a planned community.

Start Saving

Saving money for a down payment and an emergency fund is incredibly important. If you want to set yourself up for success, it’s smart to have a down payment of 20% of the purchase price, as this allows you to qualify for a mortgage with a superior interest rate. In addition to saving for a down payment, it’s wise to have an emergency fund. As a homeowner, it’s your responsibility to cover all costs for repairs, appliances that may need to be replaced, lawn care, trash collection, and anything else that may come up. It’s better to be prepared for surprise issues ahead of time, so you aren’t left scrambling for a solution at the last minute. Finally, if you’re getting a loan to buy a home, you’ll be required to pay closing costs out of pocket. Generally, these costs include a loan origination fee, appraisal fee, home inspection fee, as well as escrow and title fees. On average, closing costs can be about 3-4% of the purchase price of the home.

Choose a Lender and a Realtor

Choosing a good loan officer and real estate agent can really make the home buying process much smoother than if you attempt it all by yourself. They’ll function as your advocates and advisors, so it’s important to choose professionals you trust and who will put your interests first. Shop around and ask every question you can think of to ensure you’re making an informed decision. Once you’ve selected your loan officer, ask that they give you a preapproval letter, which shows the loan amount you’ve been approved for. This will help you and your Realtor when you’re ready to make an offer. Also make sure to communicate any expectations to them— they can’t help you find the perfect home if they don’t know what you’re looking for.

Time to Go Shopping

Now we’ve arrived at the fun part: choosing your home. Do some research to determine the areas of Southern Maryland that you’d like to live in. Take into consideration the school districts, crime rates, amenities, property values, and property taxes when making your decision. You can change the layout of your home but you have no control over the neighborhood, so choosing the right area is very important. Have your agent set up viewings and open houses so you can see what’s out there. When you’re viewing potential homes, look closely for any structural, electrical, or plumbing issues. Cosmetic items can be fixed very easily, so don’t let minor things deter you. A house doesn’t become your home until you’ve put your stamp on it anyway.

 

Purchasing a home is a huge milestone that should be cause for celebration. It can be overwhelming at times, but if you prepare yourself in advance and have a loan officer and Realtor by your side, the transaction should be smooth sailing.

 

If you need a recommendation for an experienced, local Realtor, or if you need to get pre-approved for a mortgage, please reach out. I’m always happy to help.