Purchasing a new home is a big deal. Unless you have saved up the money you need to purchase your home in cash, there are many things you should do before you begin your home search. These are just a few of the questions to consider:
- Get your credit score. Don't assume you know your credit is good. Don't assume that all items on your report are yours. The higher your credit score, typically the lower your interest rate on your loan. You are entitled to one free credit report from
each of the three main credit bureaus: Transunion, Experian, and Equifax. These companies do not give you a "score" but you will be able
to review each report and note any discrepancies.
- Stop applying for new credit a year before you apply for financing and wait until after you close on your home.
- Calculate your mortgage payment ahead of time. Don't forget to factor in PMI, property taxes and homeowners insurance.
- Practice paying your mortgage prior to getting one. You will have put good habits in place and will be building your down-payment or home improvement fund at the same time. Know what amount you are comfortable with.
- Don't overlook possible downpayment solutions. Use the internet search for additional resources. Try searching the city name, then the county name, along with word combinations such as "down payment assistance," "first-time homebuyers" and "homebuyer's
- Prepare for homeowner expenses and updates. Put money aside each month for unexpected homeowner repairs and appliance replacements.
- Obtain financing prior to beginning your home search. Also known as prequalification, obtaining financing before you start will save you time by allowing you to only view homes within your price range. Prequalification may also give you an edge if
the property you desire is also being bid on by other buyers. Seller's tend to prefer buyers who can move quickly and don't need to wait for financial approval.
- Ask Yourself a Lot of Questions Before You Begin:
- What is important about the home?
- What do you require in your location? (access to schools, bus lines, parks, etc.)
- Suburbs, downtown or rural?
Have questions about how you can prepare yourself for homebuying? Reach out to us for answers!