Home Buying To Do List

There comes a time in the life of every apartment renter to dream of buying their own home. If you reach the point where your rent would be close to a mortgage payment, then it is definitely something to consider. Of course, there will be other expenses, but a home is a solid investment that can provide a stable foundation for your family and your financial portfolio. Before you take the plunge, there are some things you’ll want to take care of first:

Clean Up Your Credit Score

Your credit score will be a key factor in determining what your ultimate mortgage might be. It can also be the deciding factor if a lending company even wants to offer you a loan. Cleaning up your credit score includes making sure there aren’t any errors and getting those numbers up. This is not something that is accomplished in a few weeks. If you start making improvements today, then you can anticipate your credit score improving in six months. It’s not that long, especially if you’re taking the time to save for a deposit.

Stop Using Credit Cards

One of the ways to improve your credit score is to reduce your debt. That doesn’t mean cutting up the credit cards and closing the accounts. It actually helps to have available credit and a history of paying your bills. You might want to consider transferring your debt to a card that offers lower finance fees. Of course, this means stop using your credit cards so you can keep that debt down.

Bring Down Your Monthly Payments

A mortgage loan officer is going to look at your ability to pay your monthly bills. If your credit card and car loan payments are taking up a big chunk of your monthly payments, then you’ll want to work on bringing those down. The lending company doesn’t want it to seem that you are living paycheck to paycheck. Lowering your monthly expenses will put you in a stronger position to secure a decent loan.

Determine Your Wish List

What will your dream home look like? Keep in mind that the home you’re buying today could be your home for the next five to twenty years. Will your family be the same size? Will your kids be going to schools in the district? Also, give thought to how many bathrooms your family will need to promote harmony. That can’t be overlooked!

Get Preapproved

Before home shopping, you’ll want to get preapproved for your loan. This will help you know exactly the range of budget you can work in. It will also put you in a stronger buying position with a seller. Being pre-approved means you’re essentially “good to go.”

Get Serious About Saving

As mentioned above, you should be saving for your down payment. Set up a separate account and every little bit you save each week should go into that account. It will certainly add up in the months to come. This is actually a habit to continue once you’re in your house as you can expect the unexpected expenses to crop up.