Have you written your New Year’s resolutions this year? If you are planning to buy a home in the near future, you will want to add a few to your list:
#1. Get prequalified.
Prequalification is not just helpful so you can look appealing to sellers; it is also helpful for you, in confirming the size of mortgage you can get. Example problems you might run into include a side-business that shows a loss or issues with your credit (see step 2). Prequalification illuminates any problems you should address.
If you do not get prequalified, you could end up seeing a great house and have to rush to prove your creditworthiness. A competing buyer could get the house just because they are better prepared.
#2. Repair your credit.
Your credit should be in as strong of shape as possible when you get ready to buy.
If you are behind on any bills, make those payments today. You also want to pay any bills that have been sent to collections, even if they are tiny.
Pay off credit card balances that are close to the limit. If that isn’t possible, transfer portions of higher balances to different cards.
Wait until after closing to apply for any other credit.
#3. Be realistic with your expectations.
Reporter Melissa Rolland advises against searching for your “100 percent house.” Instead, she suggests writing a list of five deal-breakers or must-haves. Once you know your highest priorities, Rolland says to be prepared to make an offer when you find an “80 percent house.”
#4. Check into mortgage options.
Many people think they need to put 20 percent down in order to buy a home. Actually, 4 in 10 US homebuyers today make down-payments of under 10 percent, per The News & Advance. Keep in mind that your mortgage insurance rates rise as your down-payment declines.
#5. Form professional relationships.
An average homebuyer sees about ten homes in a ten-week shopping process. It helps to choose your real estate agent and mortgage broker early so you can go to them for expert advice along the way. At Ted Bougie — First Equity, our goal is to create lasting relationships with each of our clients, and part of the way we achieve that objective is through responsiveness. As Heather Langenfeld wrote of us in her Google Review, “Throughout the process, [Ted] answered every phone call and email literally within minutes!” Experience the Ted Bougie Difference.