Buying a house can be an exciting adventure, the beginning of a new chapter in your life. But the excitement can come with a lot of stress because of the many people and many moving parts involved in the home-buying process. You can, however, make the process far more manageable by doing what you can ahead of time. So check out these 5 things to do right now if you want to buy a house this spring in Kauai.
1. Check Your Credit Score
If you want to buy a house this spring in Kauai, you should begin by checking your credit score. This important score will play a huge role in determining your financing options. Your lender will use your credit score to determine whether you can qualify for a mortgage at all and to set the interest rate and terms of the loan.
So right now you should get a copy of your credit report and score from one of the three major reporting agencies (Equifax, Experian, or TransUnion). Then, carefully go over the report to make sure it is accurate and that there are no errors that could negatively impact your credit. You should also begin paying down (or off) your debt and make all payments on time to improve your credit score.
2. Create a Budget
Next in order of importance to prepare to buy a house this spring is creating a housing budget. This will help you figure out exactly how much house you can actually afford.
Keep in mind that the purchase price and your monthly mortgage payments are not the whole picture when it comes to the cost of buying a house. In creating a budget, you’ll also need to factor in such one-off and ongoing expenses as closing costs, property taxes, maintenance/repairs, private mortgage insurance, HOA fees, homeowners insurance, and more.
The upshot here is that just because you can qualify for a certain mortgage amount, that doesn’t mean you can actually afford a house at that price. And then, don’t forget, there’s also the down payment.
3. Begin Saving for a Down Payment
In order to buy a house this spring in Kauai, you should begin saving for the down payment right now. The down payment will be a substantial amount of cash, up to 20% of the purchase price.
Ideally, you should aim to save up enough to pay 20% down. With a 20% down payment, you can avoid paying for private mortgage insurance (PMI), but with a lower down payment, you’ll have PMI as an added expense.
Many buyers, though, can’t come up with a 20% down payment, but there are lower-down payment options. These include FHA, USDA, and VA loans. Still, you should strive to save enough to pay as large a down payment as possible. A larger down payment will mean lower monthly mortgage payments, and, as a result, you’ll pay less over the life of the loan.
4. Get Pre-approved for a Mortgage
Another important step toward buying a house is getting pre-approved for a mortgage.
Pre-approval will allow you to know exactly how much you can borrow so that you’ll be able to save time and effort by shopping within your realistic price range. In addition, when you have a pre-approval letter in hand, you’ll be perceived as a serious buyer and, as a result, will have more negotiating leverage.
5. Find an Experienced Kauai Agent
Finally, perhaps the most important thing you should do to buy a house this spring is to begin looking for a good agent now. An experienced agent can help you find your dream home and negotiate the best deal possible.
So begin searching for a good agent now. This will mean getting referrals, checking out reviews, and conducting interviews – all of which can be a long, time-consuming, labor-intensive process. There is, however, a better way.
You can make the process much easier by going directly to a premier agency known for effective, quality agents. If you plan to buy a house this spring in Kauai, contact us today at 808-634-4518.