What To Do Before You Buy A Home: Three Main Steps

There are three main steps to consider prior to shopping for your home.

So you decided to buy a house. Congratulations! One of the first things you should do before you go house hunting is obtain your credit reports. Banks and mortgage companies turn to three agencies - TransUnion (www.transunion.com), Equifax (www.equifax.com) and Experian (www.experian.com). You could also look into providers that allow you to order a single credit report with all three agencies to see what each bureau is reporting. One of the reasons for your viewing your credit reports is to clean up any problems. For example, you might have an outstanding bill of $10 that can affect the interest rate a mortgage company gives you. That sounds silly, but it does happen.

After you have your credit report, the next step is getting your pre-approval letter for a home loan. There's little sense in shopping for home when you have no idea how much a lender will provide you. That pre-approval letter doesn't guarantee that you will get the loan. However, it does show that a lender will consider financing a home for you at a particular amount. This is important if the home you want ends up in a bidding war. Having your pre-approval letter lets the sellers know you are committed to finding a home while also being financially able to pay them.

Once you have your pre-approval letter in hand, now's the time to find your real estate agent. Not all Realtors are the same. Some agents work for the seller and some agents work for the buyer. As a buyer, obviously you want a buyer's agent. Soon you begin your search for a Realtor be sure to ask them if they are a buyer's agent, because they will look out for your interests in the transaction.

If you follow these steps before you buy a home, you'll find that the process works much smoother in the end.