Being a newbie at anything is tough. It’s confusing at first to learn the new lingo and how things are done. But once you get the hang of it, you can relax into the process of whatever it is you’re trying to learn.
The process of buying a Southern Maryland home is the same! If you’ve never bought a home before, it can be challenging to know where to start and tempting to jump right into looking at listings. (Hint: Don’t do it!)
Instead, let’s get you off to a good start – one that will lead to success when buying your first Southern Maryland home.
The money stuff
If you don’t know where your credit stands, waiting for loan preapproval is brutal. Those in the know, however, are more confident, understand the loan process better, and don’t stress before the preapproval decision comes in.
How can you be a member of the latter group? Start by ordering your credit report from the “Big 3” credit reporting agencies: TransUnion, Experian, and Equifax. By law, you are entitled to a free copy from each agency every year or if you’ve been turned down for credit. Make sure you order your reports from AnnualCreditReport.com, the only company authorized by the government to provide these free reports.
When you get your reports, read them carefully, keeping track of any problems you find. Each report will tell you how to file a dispute, so if you do find errors, even seemingly insignificant ones, file one. Even a small discrepancy can cause a big impact on your credit score.
Go over your finances, figuring out how much money comes in every month and how much goes out, paying close attention to recurring debt payments. The lender will do the same when it figures your debt-to-income ratio, or DTI.
If you want to calculate where you stand now, you’ll find information on how to determine your DTI on the Consumer Financial Protection Bureau’s website. If your DTI is high, work on bringing it down by either bringing in more income or paying off some debt.
Stash some cash for your down payment, closing costs, home inspection fees, and earnest money deposit. The National Association of Realtors recommends setting aside between 2 and 7 percent of the purchase price of a home just for closing costs, although I think 7 percent is rather high.
Shop for a mortgage
Not sure what lenders to use? I’m happy to refer you to some of the lenders my clients commonly work with, or you can ask friends, family, and colleagues for a referral to someone they enjoyed working with.
You’ll typically need these documents when you meet with a lender to apply for a mortgage:
- If you are self-employed, you’ll need tax returns; otherwise, gather up your pay stubs and W2s.
- Copies of the bills you pay every month.
- Bank statements (including blank pages).
Document requirements vary depending on your personal situation and the lender, so ask for a complete list of what you’ll need to supply.
Make your wish list
Yay! Finally, the fun part. Now you can start thinking about that new Southern Maryland home. What exactly do you want? Here are some questions to get you started:
- Nail down the location. Do you need to live near schools, downtown, public transportation? Do you want a neighborhood with lots of activity or something more serene? Kids nearby or few kids?
- What type of home do you want? Is there a particular architectural style? New or old?
- What are your must-haves when it comes to the interior of the home? Include things such as the number of bedrooms, bathrooms, and square footage of the house.
- Describe your dream home. Once we know your budget, we can pare it down, but for now, list everything you want in a home: For example, carpet or hardwood, gourmet kitchen, an office, a media room, gym, space to garden, and views.
- Finally, name three features that you simply must have in your new home. These items are non-negotiable, and they’ll be at the top of the list.
These are the basic steps in the Southern Maryland home-buying process. Take steps 1 and 2 and then call us for help with your wish list.
Take the steps in order, and you’ll be moving in no time!
Waldorf MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309
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