Your Checklist Before You Buy Your Next Home

This guide is here to provide helpful information and insights based on general real estate practices in the Greater Boston area. Since regulations, market conditions, and loan products can vary, feel free to reach out to me with any real estate-related questions. As a licensed real estate agent, I’m happy to assist you and I can also connect you with trusted professionals like loan officers, tax advisors, and attorneys to provide personalized advice tailored to your unique situation.

Understand Your Budget

When searching for your home, it’s critical to have a clear understanding of your budget. A mortgage pre-approval letter not only clarifies your purchasing power but also strengthens your offer in a competitive market. Here is what I suggest:

1. Shop for the Best Loan:
• Check with local Credit Unions (e.g., DCU or others) for competitive rates and programs.
• Get multiple quotes from credible lenders or mortgage brokers to explore various loan options, such as FHA, VA, MassHousing, Conventional, DSCR, or other loans, that may suit your financial situation.
2. Clarify Pre-Approval Details:
• Ensure your lender uses a soft credit inquiry for pre-approval.
• Discuss your credit score, down payment options, and preferred terms with your lender.
• Ask about rapid rescore – if your credit score requires improvement.

Understand the Additional Costs & Expenses

A home purchase includes more than the price of the house. Be prepared for these typical expenses:

·       Recurring: Property taxes, Homeowner's Insurance, Maintenance, HOA (Home Owner’s Association) fees (also known as condo fees), if applicable, etc.

·       One-Time (could be 2-5% of the purchase price): inspection and appraisal; lender’s and owner’s title insurance, attorney fees, recording fees, moving costs, etc.

Tip: Make sure your lender provides you a Loan Estimate (LE) to better understand your closing costs.

Understand Your Needs

Identify what matters most to you in a home. This step ensures that your search remains focused and efficient:

• Location Priorities:
• Proximity to work, schools, public transportation, or other essential services.
• Safety and community amenities.
• Property Type:
• Single-family home, condominium, or multifamily.
• Principal residence, vacation home, or investment property.
• Expected timeline of owning the property.
• Investment Potential:
• Rental income: Some properties (e.g., multifamily homes) allow rent to be factored into your income for financing. 
• Additional Dwelling Units (ADUs): Many municipalities permit ADUs in owner-occupied properties. Check local regulations for details.

Ask Questions

No question is too small when purchasing real estate. Here are a few common topics to ask me about:

• The Market: properties on the market for sale, recent sales in the area, average days on market.
• The Process: Steps from offer to closing and how contingencies work.
• The Property: Past repairs, maintenance, and reasons for sale.

Tip: Keep an open line of communication with me and your lender for informed decision-making.

The 10 Guidelines of Buying a Home

1. Avoid quitting your job: Lenders require stable income for approval.
2. Avoid large expenses: Purchasing a car or high-value items could change your debt-to-income ratio.
3. Don’t use credit cards excessively: Maintain a healthy credit usage during shopping and underwriting.
4. Don’t spend savings for closing costs or down payments: Reserve these funds exclusively for your home purchase.
5. Disclose all debts, liabilities, and sources of income to your loan office: Transparency helps avoid complications.
6. Avoid new credit inquiries: Lenders monitor your credit during the approval process.
7. Discuss significant deposits with your loan officer: Large deposits may raise red flags.
8. Keep your bank accounts stable: Sudden changes could delay approval; discuss with your loan officer before moving money around your accounts.
9. Avoid cosigning loans: This increases your financial responsibility and affects your credit.
10. Do not buy furniture for the new home until after Close.