Buying a home is typically one of the most important and largest single investments most people make. The Illinois Association of Realtors has compiled a list of things that people should do to prepare before their search begins.
- The first decision someone should make before house shopping is deciding how much you can actually afford to spend on the property. To determine the price range, multiply the yearly gross income by two or three. That's the price range you should shop in.
- Begin saving. Determine if you have enough saved to qualify for a mortgage and cover the down payment. Financial experts recommend at least twenty percent of the purchase price as a down payment. You should also have the funds available to cover closing costs, such as attorney fees, transfer fees and taxes, which are typically between two and seven percent of the property price.
- Obtain a copy of your credit report and make sure that it's accurate. Errors on your report could hinder the mortgage process.
- Determine how much of a mortgage you will qualify for. It's also important to investigate the different types of mortgages and decide which one will work best for you.
- Getting preapproval for a mortgage shortens the process time once you find a home. Also check to see if you qualify for any special mortgage or down payment assistance programs, such as state or local government programs for first-time buyers.
- Make a home wish list of all the things you want your new home to have. Then prioritize those features as to their importance.
- Make a list of the neighborhoods you would like to live in. Decide what criteria you are looking for – schools, safety, recreational facilities, shopping, etc.
- Calculate what the total monthly/yearly cost of home ownership will be. Include the mortgage, property taxes, utilities, maintenance and any other fees.
The process of buying a home can be complicated, with all the legal and financial documentation and contracts that are required. Make sure you hire an experienced Illinois real estate attorney to make sure that your interests are being protected.