By Delta Jones-Walker, Gary Crusader
Some say home ownership is one of the clear signs of adulthood. Well, I don’t know about all that, but it definitely offers some stake in the game when it comes to building your assets and creating a financial legacy. Purchasing a home or any other type of property is not an overnight transaction. There are several factors to consider and financial planning that should be done to ensure that the process goes as smoothly as possible. Here are a few I recommend:
- Make sure your finances are intact. Your financial history will be one of the key determining factors when lenders are deciding whether to grant a mortgage. Be sure to do a thorough review of your credit report and seek help in repairing any errors. Also, pay off debt that may be bringing your score down. A conversation with a financial advisor is a great way to develop a “to-do” list for any needed credit repairs.
- Save for a down payment. The best case scenario in home ownership is having a nest egg for a down payment and/or any needed repairs/updates you may want done after purchase. Based on your personal budget, determine how much you can afford to put away each payday and a set a timeline to reach your goal. Even if you don’t have the full amount, it looks much better to have some money in the bank when applying for a loan.
- Secure a reliable agent. Your real estate agent is a critical point person in the equation of buying a home. He or she should be dependable, have your best interest at heart and give consistent, honest feedback every step of the way. With that said, be selective when choosing your agent. Do some research by reading online reviews, getting referrals from those you trust, and even conducting an informal interview process with potential agents could be beneficial. Remember, agents are free. They get paid based on the commission from the sale, which ideally motivates them to help you find the right home at the right price.
- Familiarize yourself with the loan process and the mortgage industry. Buying a home has sev-eral moving parts. Take the time to learn about how the lending process works and what lenders best fit your financial circumstance. Sometimes your real estate agent can offer guidance or make a referral, and you can also ask trusted friends and family members who are homeowners if they have any suggestions.
- Get Pre-approved for a Mortgage. It is extremely important that you know exactly how much house you can afford. This helps avoid wasting your time and that of the lender’s exploring property that exceeds your budget. Once you have determined a range with the help of your financial advisor and have your financial matters in order, seek to get pre-approved for a loan. Pre-approval increases the chance of your bid being accepted for a home over a competitor who has not been pre-approved.
There are several other critical steps to home ownership such as getting the home appraised and inspected, and your agent can help guide you through those steps before closing. In the meantime, connect with your financial advisor to make sure this is the right time for you to be in the market for home ownership. Good luck!
Connect with Delta Jones-Walker and Atled Financial on Facebook, Twitter: @Atled Financial and LinkedIn! To schedule a complimentary consultation or a presentation to your group or organization, call 219-513-3710 or email [email protected] and mention this column. Topic ideas for this column are welcome!
*Securities and advisory services offered through Woodbury Financial Services, Inc., member FINRA/SIPC. Insurance services offered through Atled Financial Group 717 B Main Street Schererville, IN 46375 which is not affiliated with Woodbury Financial.
* Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results.