10 steps to take before buying your first home

If you’re looking to buy a home, but haven’t yet taken the plunge, there are a few things you should do first.

First of all, figure out what kind of home you want.

Do your research and see which areas have homes that fit your needs both in terms of location and cost.

Once you’ve figured out what type of home you want to purchase, it’s time to look at how much that home will cost you upfront.

Before you start house hunting, consider taking these 10 steps to ensure that your first home purchase is a smart one.

1. How much can you afford?

Determine how much you’re qualified to spend on a home and check out typical mortgage rates in your area. This can help you determine what price range will fit into your budget.

2. Get pre-approved for a loan

Before you start house hunting, get pre-qualified or pre-approved for a loan so that you’ll know the maximum amount of money that banks are willing to lend you before you start looking at homes in person or online.

You don’t want to waste your time looking at homes that are outside of the affordability range identified during this step.

3. Educate yourself about mortgages

Learn everything there is to know about mortgages, including typical mortgage rates in your area so you can determine how much you can afford.

4. Shop around for a mortgage

Find out what interest rates are available from all the different lenders in your area before finalizing anything with one particular lender.

You might end up finding that there’s a better rate out there than what you were quoted by your personal bank or local credit union, especially if you have an excellent credit score.

5. Obtain pre-approval for homeowners insurance

Before committing to purchase any home, make sure it has adequate coverage for homeowners insurance premiums, which can vary depending on where you live and the features of your home (such as whether it has fireplaces or pools).

Additionally, check to ensure that your closing date will work with your schedule so you can lock in the best homeowners insurance rates possible.

6. Figure out how much you can afford monthly

Learn what monthly price range is within your budget before house shopping to ensure that you’re not wasting time looking at homes that are either too big or too expensive for your needs, especially if your financial situation has changed (for better or worse) since taking these steps.

You’ll also need to know this information in order to get pre-approved for a mortgage and shop around for the most affordable interest rates on loans.