Pre qualify
One thing to consider before shopping for a home is to be prequalified for your mortgage. Prequalifying is usually done at no cost and lets your lender know about your income, debt, and assets. After taking these into consideration, the lender will come up with an amount that they would be willing to loan you.
It is important for a few reasons. First, it is helpful to know how much you can truly spend when you begin your search. Second, once you find the perfect home you will be able to make an offer immediately. This can put you an advantage especially if there is another party interested in the property. Prequalification shows that you are a serious buyer who is looking to close a deal.
One thing to take into consideration is that what a lender prequalifies you for is the maximum amount that they feel you can afford. It may be prudent to look at homes that cost a little less than your prequalified amount. If you spend the maximum limit on a home, you may find that the home will eat up a lot of your extra cash each month. By spending less than you are prequalified for, you will allow yourself some wiggle room each month which can be used for other things like home improvement projects or new furniture for your new home.
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