Before you start seriously shopping for a home, there’s some groundwork you should do to put yourself in the best position to buy a home.
Check your credit reports at least 3 months before applying for your home loan. This will give you time to fix any mistakes or improve your score if need be. It takes about 2 months for a credit score to improve.
Don’t accidentally raise your scores! Lenders not only look at how much credit you’re using, they consider how much credit you have available. However, now is not the time to be opening any new accounts or closing existing accounts. Don’t purchase furniture or a new car or any other big ticket item before buying a home. Lenders are very careful about the amount of debt you have and how much you pay down every month on the debt payments you have.
Don’t start house hunting without knowing how much home you can buy. To find out, you have to apply for a loan, which means you’re sharing financial information with the lender such as income and work history, student loans, child support or alimony, and credit card balances.
Get help with your loan rate, closing costs and/or down payments through federal and state housing authority programs. For example, there are also incentives for workforce personnel – police, fire fighters/emergency services personnel and teachers.
Buying a first home is a complex process. An experienced real estate broker or agent will assist you all through the process: the home search, comparable homes sold, making an offer, inspection, repairs, and the appraisal, as well as help you find the best value, neighborhood, and quality home for your budget and requirements. The seller’s real estate broker pays your broker or agent out of your loan proceeds. If you don’t use your own agent, the seller’s broker keeps the commission, so you might as well avail yourself of professional advice. Your real estate broker or agent works in your best interest.
Drive through the neighborhoods you’re interested in and look at homes. Visit a few open houses in the neighborhoods you will consider. They will usually be listed in your local newspaper with the hours hosted. Be sure to tell the real estate professional hosting the open house that you are already working with a buyer’s agent.
Buying a home can be a wise financial investment, if you buy right and hold your home for long-term gain. Because of closing and moving costs, it’s nearly impossible to buy a home and sell it immediately for a large gain, but it is possible to sell after a couple of years with no capital gains tax should you make a profit.