Buying a home is a big step, and it can be discouraging if you are ready to take it, but there are things standing in your way. You want purchasing a home to be a positive thing, not a negative one, and so it is important to make sure that you are ready for it when the time comes. Here are five things you need to do to get ready to buy a home within the next year.
Get Out of Debt
One of the most important things you can do is towork on paying down your debt, especially your credit card debt. This will help to improve your credit score, and can affect how much you will be qualified to borrow when you apply for a mortgage. It may seem like an unnecessary step, but getting rid of your debt means that you will not need to stress as much about finances when you do buy, and everything will be easier. If you are planning on buying a home soon, it is better to pay your debt rather than settle the debt, which does show up on your credit report.
Clean Up Your Credit
It is important toclean up your credit reportbefore you apply for a mortgage. You can start by pulling a copy of your credit report and yourcredit scoreto see where you stand. The higher your credit score means you will qualify for lower mortgage rates. Be sure that you have paid off any debts that are past due or in collections. Then work on paying your creditors on time for the next year. This will help improve your score. Lowering your debt-to-income ratio can help. If you do decide to close some credit cards, be sure to leave the oldest one open, even if you never use it.
Utility companies report if you are past due, so be sure to pay all of your payments on time.
If you do not have any credit at all, you may considerusing a credit card to establish your credit history. If you do this, then pay off the card in full each month. Any installment loans can help with this, such as student loans or a car loan. You can also use your rental history to help establish your credit rating, so be sure that you are paying on time each month.
Some lenders will even assist you with this step. My go-to local lender, Sharon Skinner with Anchor Mortgage, often assists her clients in sorting through their credit report to determine the best and quickest ways to increase their score. She can secure a loan for her clients with scores as low as 580, so you may be closer than you think!
Save Up a Down Payment
Saving up a down paymentcan help you prove to yourself that you are ready to purchase a home. It can also help you prepare for the extra costs that come with purchasing a new home. The larger your down payment, the more you will be able to spend on a home. A large down payment can makehomes that may seem out of reachaffordable since you are putting so much down when you make the purchase. Take the time to save up your down payment and the additional money you will need for closing costs on your mortgage.
Pay Attention to the Market
Over the next year as you get ready to buy a home, start to pay attention to the market in the area where you want to buy. This can help you understand what homes are selling for and what to expect when you start shopping. It gives you time to research schools and other factors that may play a role in where you buy a home. Remember that you should plan on staying in the home for at least five years, and so even if it is a starter home, you want it to be in an area where you would be comfortable having your kids be, if you plan on having a family.
Set a New Budget
The final thing you can do is toset up a new budgetand practice living on it. Work in the additional costs of owning a home like additional utility bills, repair and maintenance costs, and any extra that you would pay for the mortgage. The extra money can be set aside for your down payment. This will give you a good idea of how much you can afford for a monthly mortgage payment and help you be ready when it is time to purchase your home.
Find the right Realtor
A realtor can really make or break your home buying process. If you end up with a slow, lazy, or uneducated Realtor, you could be missing out on homes that are hitting the market and selling before you even see them. A good Realtor will work for you, put your interests above all (including getting the sale) AND get you the best price. Stay away from agents who seem to just want to sell you anything - you deserve one who wants to see you YOUR perfect home. Call or text me today to see if we are a good fit for each other and to begin your home buying process.
Author:Patrick Preacher Phone: 864-483-2590 Dated: November 1st 2018 Views: 167 About Patrick: ...
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