Unless you’ve been under a rock or completely cut off from news media, you probably have heard that mortgage rates are at all-time lows. Home prices are affordable (although some markets are now seeing prices start to rise), and everyone can agree on the value of owning a home. Home ownership enhances our lives in so many ways, not the least of which is a sense of having roots in a community, providing a safe haven for your family, and building wealth through owning your own home.
But if you’re a first time buyer, or even if you’re not, navigating through the process can be challenging and sometimes a little tricky! That’s where the guidance and help of a professional REALTOR® can really help you. But before you start down that path, here are some things you can do to “get your ducks in a row” and make the process as hassle- and stress-free as possible.
Understand and update your FICO score! Your credit score makes a HUGE difference in what your mortgage interest rate will be, whether or not you can obtain homeowners insurance and what rates you’ll pay, and so many other things you do every day. It’s critical that you know your score and be sure that all the information contained in your credit report is accurate. All 3 major credit agencies are required to give you a free copy of your score every year, so if you have doubts about your score, contact Experian, TransUnion, and Equifax and ask for a copy of your credit report. If your score is below 700, take corrective action to improve your score before you start house shopping.
Know what you can afford. You should consider establishing a relationship with a trusted mortgage professional well in advance of when you’ll actually need his or her services. A lender can help you identify your goals, evaluate your situation, and identify which kinds of loans you may qualify for, based on your current financial situation. He or she can also help you determine what you can do to improve your credit and increase your options.
Boost your savings. Time to get serious and start socking away money! The days of being able to buy a house with hardly any cash on hand are over! You’ll need enough money for at least a 3.5% down payment, closing costs, and several months worth of payments. If you’re looking to buy an older home that may need repairs and/or updates, you’ll need money for that as well. Don’t forget about moving costs, possibly new furniture and/or appliances, and other things you may want or need for your new home. These all require money!
Do NOT make any major purchases or change jobs! Your lender will want to see cash reserves on hand so that you can make payments. Buying a car or new appliances, or that 50″ flat screen will drop those reserves and may make it harder or even impossible for you to qualify for a mortgage loan. Put that money aside and wait until after you move to make those big buys. And DO NOT change jobs! Job history and income verification are part of the process–changing that can change your chances!
Understand your local market, and especially in the areas where you’ll be looking to buy. Watch for trends so you can be ready when the time is right.
Consult a professional REALTOR®. An experienced REALTOR® can be your best friend when it comes to helping you purchase a home. Interview 2 or 3 and find someone who you trust and are comfortable with because you’ll be spending some quality time together! A real estate professional will guide you through the process, help you with everything, and look out for your best interests all along the way. If you’re in San Antonio, I’d love to be that person for you! If not, I can help you find someone where you are who will take care of you!
Buying a home is a complex process, but when you get to the end, the rewards are so worth it! Good luck on your journey, and please contact me if I can answer questions or help you along your path to home ownership!