Do you lie awake at night dreaming of granite countertops and walnut flooring? Like many Americans, you’re envisioning a dream home. Unfortunately, the work involved in home buying has the power to turn your dream into a nightmare – especially if you have extenuating circumstances, like credit card debt or a prior foreclosure. This guide will ensure you’re armored with the knowledge needed to make your dream a reality.
1. Get a Handle On Your Credit Issues
Without preapproval, your dream home may be snatched up by the preapproved buyer behind you. The only way to get a mortgage preapproval is to have good credit. If you have extenuating circumstances, like unpaid debts, a bankruptcy or a prior foreclosure, you’ll want to contact a debt specialist to get your credit back on track. Halo America, a countrywide home ownership program, recommends working to re-establish credit and meeting with both realtors and sellers while your mortgage issues are being worked out. A second-chance will be paramount when you finally lay eyes on your dream home and wish to buy, but don’t have the necessary credit to back a mortgage.
2. Make a List of “Must Haves”
A dream home is defined by its amenities. It’s a dream home, because it’s fantastic, perfectly designed and has everything you want. You deserve the things you want, especially since you’ll be locking into a 30 year mortgage. That’s a time commitment you don’t want to make, unless you’re head-over-heels in love with the property. Perhaps your dream home is a simple split level in your home town. The kicker is that you’re dreaming of a finished basement, fully carpeted and with dry wall. Maybe your dream home is something much more fantastic – like a classic revival, nestled in the woods, with balconies and with huge white columns. It’s important to make a list of the things you must have, so your realtor knows you’re not going to settle for properties that don’t include your favorite things.
3. Don’t Stretch Your Budget
“If we look at what happened a few years back before the housing market crashed, people were taking short-term mortgages, buying dream homes and ending up in foreclosure and losing their shirts,” real estate agent Brad Malow said in an episode of Destination Home. Malow ranks stretching the budget as the single worst mistake a buyer can make. It’s up to you to determine what you can afford and make the necessary adjustments. If you can’t afford it, don’t buy it. In fact, buying a home you can’t afford is the fastest way to turn a dream into a nightmare.
Which brings us to our next piece of advice…
4. Be Willing to Make Sacrifices
So, your classic revival home is perfect on the outside. It has red roses wrapped around white trellis. It has two-story white columns, holding up a large balcony. It’s perfect, until you walk in the front door and realize the floors are fake wood laminate, instead of the walnut flooring you dreamt about. It’s time to make a sacrifice and accept that no home can be absolutely perfect, but it has the potential to be everything you want it to be. It’s a good idea to settle when you know that dream home improvements can deliver on the flooring or countertops you’ve always wanted. Overall, it’s important to be discerning. If you’re truly looking to make your dream a reality, you must be thorough. Be realistic about all aspects of the home buying experience and you’ll do just fine.