First Home Checklist

So you’ve finally decided to purchase your first home. House hunting is fun and exciting, but don’t forget about all of the planning and prep work that comes with it. Although you might feel prepared, use this checklist to make sure you’re ready for this next big step in your life.
□ Make sure you’re financially ready.
The best way to know if you’re ready financially is to sit down and crunch the numbers. Do your expectations for your new home match reality? Do a quick online search for a home affordability calculator, and find one that asks you your desired location, income, monthly debts, down payment and mortgage loan type. This will give you a better idea of a price range you should be looking at.
□ Check your credit score.
Now is the time to make sure your credit or FICO score is looking good. Your mortgage’s interest rate will be directly related to this score. The higher your score means the lower your interest rate, and the lower your monthly payments toward your home. Many major lenders require a score of at least 620 for a mortgage. If your score is below that or you just want to boost it, start paying off your debts reliably and on time ASAP.
□ Secure a down payment.
Most mortgage lenders require a cash down payment of 5 to 20 percent of the price of a home. This past December, according to Long & Foster, the median sale price for Cape May County homes was $389,900, which is anywhere between $19,495 and $77,980 needed for a down payment. And of course, the more you pay up front, the less you pay monthly. Since most of us don’t have this kind of cash lying around, it’s time to start seriously saving. Designate an amount of money you’re able to put into a savings account on a weekly, biweekly or monthly basis, and you’d be surprised how it adds up.
□ Attend a local home buying seminar.
It’s important to be knowledgeable about the journey you are about to embark on. Keep an eye out for local home buying seminars offered by banks and nonprofits, and even if you think you know everything, go anyway. There’s always something new to learn or something to be reinforced. These seminars are usually free, so what do you have to lose? You’ll learn things like bank criteria for loan applicants, down payment assistance, what each portion of your mortgage payment goes toward and much more.
□ Find a trustworthy real estate agent.
A house is a huge purchase, so make sure to do some research and find a real estate agent who really knows what they’re doing. Don’t just settle for the first one you find. Contact a few different ones – at least three – and ask questions regarding how long they’ve been in real estate, how familiar they are with the area and if they have any relationships with lenders. Don’t feel funny being inquisitive – buying a home is a big deal!
□ Shop for your mortgage.
Just like you shouldn’t settle for the first real estate agent you find, don’t settle for the first mortgage you find, either. Mortgages are not “one-size-fits-all,” so do some “shopping” to see what’s out there. Find a lender you trust and discuss your financial situation, and the lender will help you understand the options that are available to you.
□ Consider closing costs.
Aside from your down payment and monthly mortgage fees, you will also have to pay closing costs. This is when the title to the property is transferred to you at the closing of the real estate transaction. Closing costs can range from 3 to 6 percent of the price of purchase thanks to taxes, transfer fees and other expenses. Don’t forget to budget for closing costs so you aren’t blindsided. You can easily find a closing cost calculator online and provide your location, home price and down payment to get a ballpark figure.
□ Be prepared for the future.
Don’t drain your savings on your new home. Work your budget so you have an emergency fund established with enough money to cover three to six months of living in case you’re faced with an unexpected financial hardship. Also, it’s important to keep making contributions toward your retirement savings.