It takes effort on your end - plus the universe being on your side - to turn the “buying a home dream” into reality. Once you know you can afford buying a house, follow these goal-setting tips to become a savvy home buyer:
Start with the hard-hitting questions
You need a solid idea of the end goal in order to successfully plan how to get there. Think about the home you want to purchase, asking yourself questions like:
- Do you want a new home or a resale?
- What's your ideal location?
- What features do you want?
Distinguish your list of must-haves and wants, and then go a step beyond to rank home features by importance.
Outline your SMART goals
Once you have a better idea of what you want, you can start setting SMART goals, which are:
When purchasing a home, it’s important to outline a SMART goal plan. This means considering the amount of money you'll need, as well as how much to save each month to have enough funds by a designated date. FINRA Investor Education Foundation put it this way: “the general goal of buying a house becomes a SMART one once you say I will buy a home in two years with $10,000 saved for a down payment."
You’ll need to focus on the details that are specific to your own desires and financial situation, but the overall idea is to set goals that easily lend themselves to achieving them.
Write out your plan
Your goals will feel more official when you transfer the plans in your head to paper. Plus, a written-out plan will help you visualize a timeline building up to the big purchase.
Craft an appropriate budget
Consider how much you already have available for a down payment, as well as how much you may need to save to reach your ideal amount. Don't forget about the additional costs of homeownership, such as closing costs, monthly mortgage payments, utility bills, insurance and community fees.
You may need to make cuts to reach your goal, such as eating out less frequently or forfeiting a monthly subscription. (Goodbye Netflix and Hulu, sniff sniff.) Try downloading budgeting apps on your mobile for some extra help.
Work on boosting that credit score
Get a copy of your credit report to see what score you're working with. You'll need a favorable one to obtain a better loan, so be sure to pay off debts and meet monthly minimums to boost your credit score before applying for a mortgage.
Get expert advice
Reach out to realtors and financial advisors for expert guidance on how to meet your home-buying goals. They can help you identify the realistic options and timelines for your situation.
Prepare for the move
The more organized you are to move, the less stressful it will be. To be a calm, cool and collected homeowner, follow these moving tips and get your checklists ready.
Once you find the perfect home, you'll want to be prepared for any unforeseen home repairs. See how plans from HomeServe can help with the costs of covered repairs.