The new year is for refelction, resolutions, and planning. If one of your resolutions for 2019 is to buy a home, we've listed the 6 most important things for you to get prepared and make the process of becoming a homeowner easier.
Evaluate Your Finances: Before you start house hunting, you need to have know how your purchase will be impacted by your finances. How much income do you earn? What do you spend money on? Do you have enough in savings to pay all of the closing costs and to furnish your home or make repairs, once you've purchased? Answering these questions will help you understand whether you are ready to take on the financial requirements of homeownership.
Get Your Credit In Order: If you don't know your credit score, you should find out before starting the process. You're entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies, and can order a report online from annualcreditreport.com, the only authorized website for free credit reports, or call 1-877-322-8228. Credit is one of the most important factors in getting a mortgage and lowering your interest rate. If you have poor credit, you can always take steps to improve it by paying your bills on time, or working with a credit reapir company, like North Shore Advisory.
Stay Focused On Your Goals: After you have your finances and credit in order, you'll be able to see whther you'll qualify, or what additional steps need to be taken to make homeownership a reality. If you need to save additional money, start reducing some expenses at the beginning of the year and set up a monthly savings deposits into a "do not touch" account.
Get A Pre-approval or Pre-qualification: A pre-approval letter from a lender will give you a better understanding of the maximum amount that a borrow will lend to you for a home loan. Based on your income, debt, credit and bank rates, the lender will provide an amount that you are qualified to borrow. Having a pre-approval or pre-qualification letter will help you move faster, with greater confidence, in competitive markets and let the seller know you're more serious than other potential buyers. Keep in mind that you should only borrow what is comfortable for you, making sure that you don't put yourself under financial strain. Studies have proven that how much you pay for your home, in relation to your other expenses, is one of the largest factors in building wealth.
Organize Your Paperwork: The buying process is complex, and there's a lot of paperwork involved, so it's important to get organized as early as possible. Your bank will need copies of your tax returns, pay stubs, bank and asset statements, your last two years of W-2s, and your credit report. Starting the process early will minimize any mis-steps down the road.
Lean on Your Team: The better your team, the better your experience will be. Considering hiring a trusted team of industry professionals to help you throughout the homebuying process. The expertise of a trusted local agent who knows your neighborhood and price range, an attorney that has experience with similar purchases, and a good home inspector can save you a tremendous amount of money in the long run. Scout can help you find these trusted team members at no fee, so it makes sense to take advantage of our services.
Visit www.trustscout.com to learn more about how you can save time and money when it comes to your home search.