Is home ownership in your future? If your goal is to buy a home within the next six months or sooner, it would be best to start arranging your finances now! So, instead of jumping straight to the house hunt, let’s review some essential items to prepare you for buying a home.
Check Your Credit Report
Preparing your credit score and financial history are critical components of mortgage qualification. With AnnualCreditReport.com, consumers can receive three free credit scores per year, one from each of the main credit reporting bureaus. Once you have received your report, review it for any inaccuracies or errors, and if necessary, take steps to improve it.
Take these steps right away to get your credit in better shape:
- Always pay bills on time.
- Avoid applying for new credit cards.
- Dispute any inaccuracies on your credit report.
- Pay off any debts possible.
Build Your Savings
You may have already started saving if you have set the goal of buying a home. In competitive housing markets, some buyers may benefit from a larger down payment. But don’t assume you have to put down 20%. Certain programs, such as those available to veterans and first-time home buyers, allow some people to make smaller down payments.
Home buyers usually have a downpayment at the forefront of their minds, but don’t forget it is wise to have funds set aside for unexpected emergencies and repairs that may arise with the new home as well.
Get Pre-Approved Before Searching
Never begin home shopping without a pre-approval in hand! A pre-approval helps you define your housing goals and shows potential sellers that you are serious about purchasing their home.
Once you’ve decided on a lender, you should request a preapproval letter, which details how much you might be able to borrow. Unlike a prequalification letter, a preapproval letter informs the seller that lenders have reviewed your finances and confirmed that you qualify for a loan, giving you an advantage over buyers who can’t prove that they will get financing. The lender may verify your income, check your bank statements, and pull your credit in order to obtain this letter.
Interview Real Estate Agents
Hiring a real estate agent who looks out for your best interests will make the home-buying process much easier. Investing the time to interview a few agents can make a significant difference in your transaction, so select someone who will support your goals, work within your budget, and provide expert guidance.
Inquire about potential real estate agents’ backgrounds, knowledge of your desired area or neighborhood, and fees.
Bottom Line
Don’t put off preparing for your first (or next) home purchase, it is in your best interest to start taking these steps now! When you get to the point of seeking guidance from a Realtor, you won’t be disappointed in our team at 316 Realty Group. Our Realtors have a vast knowledge of the greater Houston, Dallas/Fort Worth, Austin, & Waco markets and care for our clients like family.
Are you ready to have a conversation about your next home purchase? Reach out today!