Step #2: Get Pre-Approved for a Loan
This step ties into the first step. Part of knowing what you can afford and being financially prepared includes knowing whether you are pre-approved for a loan. A lot of seniors, or longtime homeowners who are nearing retirement, make the mistake of assuming they no longer qualify for a loan based on their age. This could not be further from the truth. Many banks, and other lending agencies, will absolutely offer mortgage loans to prospective buyers, regardless of age, as long as they meet the other qualifications required of all buyers. It’s also a mistake to assume that just because you’re a seasoned, longtime homeowner who will be moving from a bigger home into a smaller one that you’ll be able to afford it all on your own. While it’s a possibility that you stand to make a profit from the size of your current home, and enjoy a sizable cash flow into your retirement years, you still need to make sure you qualify for a loan before moving forward in the home-buying process. It’s generally a good idea to know your limits and stay on track so you don’t get into any financial trouble. So be smart throughout the process. Keep your emotions and temptations at bay, and do your best to make practical decisions based on your budget and overall situation.
Step #3: Create a List of Needs vs. Wants
We’ve dedicated an entire chapter to this important concept — making a list of both your needs and your wants when it comes to your ideal next home — but it bears repeating here, as it’s a fundamental step in the 12-step guide of buying a home.
As a recap, you need to think about, determine, and write down
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