Six Important Steps Before Buying a Home

Preparing for the home-buying process

05/30/2017

Six Important Steps Before Buying a Home

So, you’re ready to buy a home. Home ownership is a major milestone in anyone’s life — but also one that involves many complexities and responsibilities.
 
That’s why it’s important to take the necessary steps before shelling out the down payment. If not done correctly, buying a home can cause major financial stress that can last a lifetime.
 
Before signing on the dotted line for your home, consider these tips — from determining where you want to live to all the documents that go along with the purchase:
 
1) Research the neighborhood - You know what they say: location, location, location. Consider factors like crime reports, school options, job market and cost of living. And above all, it has to be a place you want to stay for a while. In fact, experts recommend buyers plan on staying in a new home no fewer than five to seven years.
 
“You’re going to spend thousands of dollars to get into the home. To get out of it is going to be equally expensive and may possibly cost more when you do it in less than five years or in a down market,” says HSH.com (a publisher of mortgage information and rates) vice president Keith Gumbinger.
 
2) Connect with an experienced lending partner - If you’re looking to buy a home, we can help you get the mortgage you need. Contact us today.
 
Meet with one of North Shore Bank’s home lending experts who can help guide you through preparing for and completing the lending process. Our Mortgage Loan Professionals are able to offer you dependable direction and help answer your questions, no matter what stage of the process you are in.
 
3) Get pre-approved - Ensuring that you’re pre-approved for a loan makes the home-buying process a lot easier on you.
 
“Today’s homebuyer needs to be very savvy and have an upfront pre-approval letter that will help give the seller confidence that [the buyer] can close the loan and obtain the funds,” explains Mortgage Lender loanDepot President and COO David Norris. So before you even begin your search, make the process of getting pre-approved mandatory. And along with that, be patient in terms of getting this pre-approval.
 
North Shore Bank’s free mortgage pre-approval give you the confidence you need when putting in an offer. Not only will you know how much home you can afford, but when sellers, builders, and realtors know that you have been pre-approved for home financing, you become a preferred buyers. Plus, you will save $100 off closing costs upon closing your mortgage loan with us. There is now cost and you can apply anytime online.
 
“[Buying a home] is really like finding a job — it’s going to take a lot of time to prepare,” says ClearPoint Credit Counseling Solutions Certified Housing Counselor Cara Pierce. “That way, when the deal comes along, you’re ready to pounce on it.”
 
4) Establish what you can afford - You might find that the maximum you’re prequalified for is pretty high — and that doesn’t necessarily mean you should spend that amount on a home. Instead, determine what you feel comfortable spending.
 
“Each person has to know the difference in his [or her] own mind,” says Combs. “If you’re just getting by with your current rent payment and the lender says you can qualify for more, give it some thought.”

Collect necessary financial documents - There’s a lot of paperwork surrounding home buying that a lender will need. Items such as income tax returns, W-2 wage statements, paycheck stubs, bank and investment account statements, divorce decrees, child support documents, and recent credit card statements. Keep all these documents in one folder, which will keep you organized and ready. This will also help you come up with your budget — what you can comfortably afford as a down payment and monthly payments, as well as taxes, insurance and other expenses. 
 
5) Lock in a realtor in advance - “Start to talk to your local realtor six months ahead of time,” suggests residential broker and former president of the National Association of Realtors Pat Vredevoogd Combs.
 
Most have a good handle on the available mortgage programs, have experience working with your lender, and can help identify homes within your areas of interest that contain your required home features. They can also more quickly show you homes that are new on the market, allowing you to get a jump on others looking for similar homes.
 
6) Try to keep a steady credit history - If possible, during the process of home buying, put off any major changes that can affect your credit, such as switching jobs or purchasing a new vehicle.
 
“When you sit at the closing table, you will be asked to sign a document that says your credit is the same as it was when you originally applied for the loan,” says Combs. Maintaining a steady financial balance sheet will avoid delays during the process of a pending mortgage application.
 
If at any time you have questions about your home search, let us know. North Shore Bank has been in the home lending business since 1923, and we want to help you find your next home.

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