By Mechele Agbayani Mills

Buying a home can be an exciting yet stressful event in life. It’s likely the most expensive purchase many will make. As the Federal Reserve has indicated, interest rates are likely to increase this year. Many consumers will be looking to purchase a new home soon. Better Business Bureau serving Central East Texas urges consumers to do your research before putting money down on a home.

Mechele Agbayani Mills, President and CEO of BBB serving Central East Texas. “However, it is important to take the time to do your homework throughout the process.”

BBB offers the following tips to keep in mind when purchasing a home:

  • Create and maintain a budget. When you purchase a home, you will be pre-approved for an amount by the lender. However, it’s important to create a budget that is realistic to your situation. Things to consider are existing debts repayments, current amenities such as cable or internet, and appliance and furniture purchases for the new home.
  • Check your credit. Your credit will be a key factor in whether your loan is approved and will determine the interest rate and loan terms. Go to annualcreditreport.com for a free copy of your credit report every year from the three nationwide credit reporting companies.
  • Save early. It’s common to put 20 percent down on a mortgage, but many lenders permit less with some first-time home buyer programs allowing as little as 3 percent down. Some tips for saving for a down payment include setting aside tax refunds and work bonuses, setting up an automatic savings plan and using an app to track your progress.
  • Research mortgage options. Mortgage options include 15, 20 and 30 year fixed-rate mortgages as well as adjustable-rate mortgages. Many homebuyers only get rates from one lender, but the Consumer Financial Protection Bureau urges comparing rates from at least three lenders which can save you more than $3,500 over the first five years of a loan.
  • Contact government agencies for assistance programs. In addition to federal programs, many states offer assistance programs for first-time home buyers with perks such as tax credits, low down payment loans and interest fee loans for a certain amount. Check with your county and municipality as first-time home buyer programs may be offered.
  • Research for the right real estate agent. You’ll be working closely with your real estate agent so it’s essential to find someone with whom you get along. The right real estate agent should be highly skilled, motivated and licensed with the Texas Real Estate Commission. Go to bbb.org to find a trustworthy agent and read past customer experiences.
  • Understand what a home inspection entails. Once your offer is accepted, a home inspection will be required to examine the property’s condition inside and out. Make sure the inspector can access every part of the home including the roof and any crawl spaces. Attend the inspection and pay close attention, ask questions and don’t be afraid to bring up any concerns that you want closely inspected. Find a reputable home inspector at bbb.org.

Mechele Agbayani Mills, is president and CEO of BBB serving Central East Texas.