It's finally time to purchase your first home. That can be a daunting task. If you're not ready to jump in and purchase a big home, you might have decided to begin with a starter home. Purchasing a starter home gives you the opportunity to build up to a larger home. Before you start shopping, make sure you're prepared to enter the housing market. Here are four steps you need to take before you purchase your starter home.
Find the Loan First
If you're planning to find the perfect house and then shop for the loan, you might end up disappointed. The best way to shop for your starter home is to secure the loan first. Working out the details of the home loan before you start shopping will allow you to know how much of a home you can actually afford. The last thing you want to do is find the perfect home and then find out that lenders won't approve the purchase. Take the time to obtain pre-approval before you start shopping. Contact a business, such as Premium Mortgage Corp, for more information.
Once you have your pre-approval, you'll know exactly how much house you can afford. However, that doesn't mean you should look to max out your home loan. Instead, provide yourself some wiggle room by choosing a home that comes in slightly less than the amount you've been approved for. Purchasing a home that is less than what you can afford will protect you in the event of a financial emergency.
Buy to Sell
If you're not planning on staying in your starter home indefinitely, you need to buy to sell. That means you need to have a plan for selling before you purchase the home. Some of the things you should plan for include:
- Length of time you plan to stay in your starter home
- Price range for future home
- Plans to increase value of starter home
Pay Attention to the Inspector's Report
When purchasing a home, ignoring the home inspection report is one of the biggest mistakes you can make. The inspection report will identify all of the potential problems that exist in the home. If the home inspection report identifies major problems with the home, you should reconsider the purchase. If you have your heart set on the home, ask the sellers to fix the problem before you make a final offer.
Before you purchase your starter home, make sure you're prepared for the process. The information provided here will help you avoid costly mistakes.