Are you considering purchasing a home? How exciting! Searching for, viewing, and dreaming about homes is so much fun! Some portions of the home buying process are a little bit less fun, but necessary all the same. I strongly recommend taking care of these items before you jump into your home search with both feet. The list below spells out the necessary steps to take - these things take some time and effort, but are worth doing in advance so that when you do locate the perfect home for you, you are prepared to make an offer and move forward without delay. Set yourself up for success by following these steps.
1. Check your credit score. Knowing your baseline score before your purchase is a must - it will have an impact on the interest rate you are offered when you take out your mortgage. Luckily, there are many ways to find out your current score. Check with your credit card provider and bank - oftentimes, free access to your credit score is a benefit offered. You can also request your credit score for free once every 12 months from each of the three credit reporting agencies (Experian, TransUnion, and Equifax). There are also several financial services websites that allow you free access to your credit scores by creating a profile (Credit, Credit Karma, Mint). Once you do know your score, if it is less than ideal, take steps to begin improving it. Every little bit of improvement can help when purchasing a home!
2. Don’t open new lines of credit. Resist the temptation when credit card applications arrive in the mail or when you are offered a percentage off of your store purchase by opening a card. This is the time to devote all of your attention to home buying and not add to your credit card burden as it can negatively effect your credit score and complicate the mortgage approval process. Just say no!
3. Suggest financial gifts. During the holidays or around your birthday, if someone asks for your Amazon wish list, instead suggest cold hard cash! That extra money can go a long way when put toward your down payment or used for other home purchasing and moving expenses.
4. Keep tabs on interest rates. We’ve seen some fluctuation with respect to interest rates. They are low right now but expected to escalate slightly in coming months. It's important to have a general idea of where rates are sitting and how they are trending before you begin your home search.
5. Find a great mortgage lender. You’ll want to decide on a lender that you trust and are comfortable with. I am more than happy to recommend someone fabulous to you - just ask!
6. Get pre-approved for your mortgage. Note: this is different from being pre-qualified - learn more about the differences here. What this means is that you will submit a mortgage application and provide all of your financial information to your mortgage lender. They will then get to work investigating your unique financial situation, and will determine how much money they are willing to loan you. You will also be given an idea of what interest rate you can expect. This is super useful information because it can help you to really solidify the budget for your home search, and will also allow you to move forward with placing an offer once you find your perfect home. Sellers love a pre-approved buyer!
7. Find a fantastic real estate agent! Buying a home is a huge, important decision. You'll want to work with a professional agent who has the technical knowledge and experience to guide you through the process. I recommend asking the agent(s) you are interested in for an informational interview - ask a few questions and get a feel for their working style and personality to see if it clicks with your own, then take a few days to make your decision.
Always remember, I am here for you! If you have questions or need help with anything, I am just a phone call, text, or email away. Let's chat!