You are tired of looking at the same cream-colored walls and beige drapes. However, your landlord won’t let you paint or decorate your rental to your tastes. You have no control over color choices, changes in your apartment or even if you can put a plant on your balcony. Perhaps it’s time stop renting and start thinking about purchasing a house in New Orleans. Buying a home means more freedom and putting your hard-earned money towards your investment instead of giving it to the landlord. Securing a mortgage and purchasing a home isn’t something to jump into; it takes a great deal of preparation and planning.
1. Start saving
Before you start browsing listings and dreaming of hardwood floors, you need to take a hard look at your budget and start squirreling away money. You will most likely need a 20% down payment to put on the place you choose plus a little more to cover extra expenses. By setting aside money each month for your down payment, you will be better able to start adjusting your budget. You will eventually make room for a mortgage payment and all the added expenses, such as insurance, home owner’s association fees and taxes that come with owning your own place in New Orleans.
2. Check your credit score
When it’s time to start applying for a mortgage, lenders will pick through every aspect of your financial history and credit, so you should be the first to pick up a magnifying glass. While a high credit score is important, there are other things you should look out for as well. Request a free credit report and look for any errors. If there are mistakes on the report, start to fix them by contacting both the credit bureau and the original creditor.
3. Get pre-approved
You also should get pre-approved for a mortgage so you know how much money you can borrow. Not only will this keep you from looking at homes you won’t be able to get a loan for, it will make your real estate agent’s job easier. More importantly, it will show sellers that you are a serious buyer. When sellers and their real estate agents see that you have already taken steps toward getting a mortgage, they will be more likely to consider any offers that you put in. In addition, they may be more willing to negotiate with you.
4. Know what you can afford
Knowing the mortgage amount you can be approved for is not the same as knowing what you can afford. While a mortgage company will carefully consider your income and other debts, only you have a true picture of your monthly expenses. Start by categorizing your purchases and consider what you are spending on everything from coffee and clothing to daycare or entertainment. A close look will probably reveal areas to cut back. Making adjustments is easier to do before you have already committed to a house payment.
5. Make a checklist
It’s finally time to dream a little. After working through all the financial aspects, you are ready to start making a checklist of what you need and want in a home. For example, the need column might include a good school district and a short commute to work while your wants might include an open floor plan and double sinks in the master bathroom. Setting priorities will help to whittle down the choices so that you can focus on the listings that best match your criteria. However, don’t get carried away with wishes for walk-in closets or spa tubs. You will most likely need to make compromises to find a home in New Orleans that both works for your family and fits your budget.
6. Team up with a real estate agent
Buying a home is a long process with many details to navigate. Even if you have done your homework, you will need a professional on your side. Everyone knows that a real estate agent will be able to show you houses. However, a professional agent can do much more. This includes walking you through the entire process, such as identifying homes that meet your needs, explaining the details of applying for a mortgage, negotiating offers, and leading you through the signing process. You will spend a great deal of time working with the real estate agent that you choose, and it is critical to find one who is both well qualified and whom with you connect.
Buying your first home is a big decision, but with a carefully thought-out financial plan and the help of a professional agent it can be a step toward a happy future.