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Preparing to Buy a Home? Follow these Steps First

Posted: February 19, 2019 by Alan Tucker

There are a number of things that have to be done before you can buy a home, and the first step comes long before you find a real estate agent! As you may know, any time you go to make a major purchase of any sort your credit score will come into play—and buying a home is no different! In addition, ensure that you’ve reviewed your budget and that you’ve accounted for all of the things that come with purchasing a home! Also, once you have these two steps taken care of, take the steps to get pre-approved in order to show those selling a home that you’re serious! There are a number of things to be done prior to buying a home, but starting with these three things is a great way to ensure that you’re fully prepared to buy a home!

Check your Credit Score

A home is the largest asset that most people will buy and/or sell in their entire lives, and thus having good credit is paramount in ensuring that the process goes smoothly! Your credit score can greatly impact your ability to get pre-approved and holds serious weight when it comes to your interest rate on your mortgage loan. There are a number of things that factor into your credit score, but your payment history and credit utilization are the two things that impact your score the most! As such, if you find that your score is lower than you’d like it to be, then there are a few ways that you can work to improve your score! A good way to reduce your credit utilization is to reduce your debt and make a plant to consistently do so! Ultimately, having a good credit score is a great way to reduce the interest rate on your mortgage loan, and thus you’ll owe less money over the life of the loan!

Make Sure your Budget is Sound

As with any major purchase, you’ll want to ensure that your budget is sound and that you’ve taken the change in expenses into account! If you’ve gotten your credit score in order, then you’ll have a decent understanding of the mortgage loan and corresponding interest rate that you can expect and thus can add those into your budget! In addition, you should consider potential additional expenses with your new home. Is there a room that you want to re-paint? What if the home is in a neighborhood where home owner’s association fees are required and/or are higher than previous fees that you’ve been paying? As with any good budget, you should expect the unexpected and plan accordingly!

Get Pre-Approved

Getting pre-approved is vital in the home-buying process, and home buyers who are already pre-approved are much more attractive to potential sellers than those that are not. In addition, it’s important to note that getting pre-qualified is not the same thing as getting pre-approved, and getting pre-qualified is simply based on information that you have provided to a lender. Pre-approval happens after a lender takes a look through your entire financial history, and thus it carries much greater weight! As such, you should understand the size of the loan that will be available to you, and thus what homes you can and cannot afford! Lastly, there’s no rule that says you have to commit yourself to the first lender you work with—don’t be afraid to seek an opinion from separate lenders or even employ the help of a mortgage broker!

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