Preparing to Buy a Home

You've started noticing "for sale" signs everywhere and you're more curious than ever about the homes you see. Another street, neighborhood or city seems to be calling to you. Perhaps your family dynamics are changing and you need more space. Whatever the reason, you've decided it's a good time to buy a home. So how can you best prepare for the huge investment a home purchase represents?

KEEP YOUR WORK HISTORY STEADY

A new career is great if it means more money and more stability from your family. However, mortgage lenders usually want to see a solid work history with about two straight years at your current job. If taking a position at a different company is in the cards for you now, you might consider chatting with your prospective lender to get his or her thoughts on how that might affect your ability to qualify for a loan. (See our preferred lenders here!)

HOLD OFF ON THE SPENDING SPREE

Avoiding any major purchases isn't just a matter of ensuring you have as much money as possible to put toward your home - it also is a smart move in terms of ensuring your loan approval! By taking on additional debt in the form of a car payment or other installment loan, or by demonstrating questionable financial responsibility by blowing your cash reserves on a house full of new furniture and toys, you're forcing your lender to consider whether you're ready and able to handle a mortgage. (Think it sounds crazy that someone would do such a thing? We've seen it happen - causing loans to fall through after they were approved!)

JUST SAY NO TO CO-SIGNING

This too may sound like a no-brainer, but it's worth a mention. Remember that co-signing for someone else's loan is essentially the same as taking on that debt yourself, because if the other person doesn't pay, you're on the hook just as much.

DON'T BE LATE

This could fall under "life advice" just as much as "homebuying advice," but it should go without saying: pay all of your bills, on time, always! Not only will late payments negatively impact your credit score, they'll also potentially jeopardize your loan, even if you already have your approval! (Basically, if you demonstrate yourself to be less creditworthy after a loan is approved, but before closing, that approval can be rescinded.)

PLAN AHEAD FOR YOUR COSTS

Depending on your circumstances, there are loan products out there for almost everyone - from conventional loans that require 20% down, to FHA loans that only require 3.5%, to VA loans and other programs that may require no down payment at all. Still, having an idea of what kinds of funds you have available to put down on your home, and where those funds will come from (savings, liquidated assets, gift monies) will simplify the mortgage loan process for you and for your lender. Similarly, while your purchase contract may stipulate that the home sellers are paying all or part of your closing costs, it's a good idea to determine how much you'll be able to contribute so that you can discuss this information with your real estate agent. Finally, make sure you're tucking away money for your packing supplies and moving expenses, so that you aren't forced to run up a credit card to cover these costs!

HAVE FUN SHOPPING AROUND, BUT DON'T MAKE YOURSELF CRAZY

Lots of people absolutely love looking at houses, whether it's perusing real estate websites or traipsing through every open house on the block - even if they're not actively searching for a home! If that's you, then more power to you. (And you should definitely be using my awesome mobile app to search to your heart's content!) But if you find the process overwhelming, then by all means, don't exhaust yourself doing it! Your real estate agent - which of course I hope is me! - will take the time to get to know your needs and wants for your next home, and will help narrow down a much shorter list of potential homes that meet all of those criteria. 

If you're ready to start seriously planning your next move, and want to be represented by a professional real estate agent who will advocate for your best interests and deliver stellar service from start to finish, look no further! Simply contact me and we'll get the process started!