Before You Buy a Home
So you are tired of paying rent and you are ready to make those first steps to actual home ownership. You are ready to plant some roots in your community, but you don’t know where to start. Great news you have come to the right place. Buying a home is a big commitment. It is not an impulse purchase. Follow these simple steps and you too will be ready for home ownership.
Tip #1 – Check Your Credit Score
Before you start borrowing money or browsing for homes online, you need to know where you and your spouse stand on your credit score. This is the number that lenders will look at to determine how much you can borrow. The higher your credit score the lower your interest rate (which is a good thing!). There are many sites online and apps that can provide you a free credit score and credit report.
Tip #2 – Clean Up Any Credit Blemishes
So you have your report in your hand and there are a few surprises on it. Credit errors are common and if you think there are errors on your report contact the credit bureau to correct that bad info. Is your credit less than you were hoping. There are ways to boost your score (eliminate any credit card debt, pay your bills on time and fix any late payments)
Tip # 3 – Shop for a Lender
Don’t just go with the first bank that offers you a loan amount. Do some shopping around. Feel free to contact our office for advice on which banks to contact for a conventional loan or which loan investors and mortgage officers we would recommend.
Tip #4 – Secure Mortgage Pre-Approval
So you have found the right lender. Ask the lender for a pre-approval letter. This is one of the best things you can have as you are shopping for homes and making an offer on a home. The pre-approval letter shows a seller you are serious when it comes to making an offer. Unfortunately we have seen situations where potential buyers go house shopping first make an offer and it falls through because they cannot secure financing. This is not fair to you the buyer and the home sellers. That pre-approval letter tells a seller you are not making an empty offer.
Tip #5 – Save Up for a Down Payment
To get the best rates you need to at least be able to put 20% down payment on a home. If you are looking at homes in the $175,000 range that is at least $35,000 you need to have saved away. If you are looking at homes in the $200,000 range you need to have $40,000 saved up. That is a lot of money. You may want to start saving before you are ready to buy.
Tip # 6 – No Major Life Changes
When you are ready to buy a home it is not wise to make any major life changes that could affect your finances. Do not apply for a new credit card, do not switch jobs, don’t buy a new car, ect. Just a credit pull alone from a car dealership is enough to negatively effect your credit score.
Finally, contact a local real estate agent you can trust. We are here and available to help. We would love to be your real estate agent and help you find that dream home. Feel free to contact us below.
Josh Longmire is a Licensed real Estate Agent and would love to help you buy a home.
Contact him at: