Wednesday, March 4, 2015
Before Buying a Home Get Organized
With tax season in full swing, now is the perfect time to get organized. Buying a home is one of the largest investments you will make, so it's important to be well prepared before taking that leap.
1. Get your credit in order.
Your credit is a large factor in determining whether or not you qualify for a mortgage, so it's important that you determine your credit score before shopping for a mortgage. The higher the score, the easier it will be to qualify.
I like using Credit Karma , although you can also get your free reports from:
Annual Credit Report, or pay for them from the credit bureaus:
Trans Union http://www.transunion.com
2. Prepare for expenses before you buy.
Plan for what you will need to spend before the actual purchase. You'll need enough cash for a down payment, closing costs, and a few months worth of mortgage payments plus enough cash to fund any lender required escrow account. Figure out what extras you may need, like moving costs, furniture, and repairs.
3. Know what you can afford.
Before you jump into a contract, you need to make sure it's something you can actually afford. List your monthly expenses, then subtract that total from your monthly net income. Here's a guideline to keep in mind: your housing costs should be no more than 30% of your net pay.
4. Have credit lines.
Most lenders prefer that you have three of more credit lines that have been open for at least a year? These can range from credit cards and students loans to a car loan. You should also avoid closing them because it may impact your credit score.
5. Do your research.
Above all, it's crucial that you do your research before buying your new home. In addition to the price of the home, you must always consider other factors such as property taxes, homeowners insurance, utilities, maintenance, and repairs.
6. Consult a real estate professional.
Call or contact me directly. I can walk you through all the steps for preparing to buy a home. Whether it's your first home or your forever home.