Financial Preparation Before Looking at Houses
Too often home buyers fail to prepare themselves financially before looking for a home to purchase. Doing so is a common mistake that many future home buyers make even though this may be the largest purchase of their lives.
Not taking the proper steps to set yourself up for success could mean that you do not get your dream home, or it costs you more than it should.
Here are some of the best tips for preparing yourself financially before starting the home search process. By doing so you’ll be two steps ahead of the game and well on your way to home ownership!
Connect with a Lender Far in Advance
Getting the best home loan should be one of your primary goals when buying a house.
Before you start driving around neighborhoods, flipping through listings online or even stopping in to speak with a Realtor, it would be a good idea to know what your buying power is today.
If you have a goal to be able to buy into a particular neighborhood, you should put a plan in place to be able to achieve that.
Speaking with a lender first to develop a plan of action on how you can qualify to buy a home in that area or price range is critical.
My recommendation is that you have an initial discussion with a lender nine months to one year in advance. Sound crazy? I know many people do not know that far in advance that they may be buying a home next year. For those who do, this is extremely important.
Why is it Important to Plan So Far in Advance?
First, your lender will let you know what you can qualify for today based upon your income, down payment and credit score. There are other factors which play a part including credit events and large monthly payments on your credit report.
Your Income is Vital
Income – Income sometimes is difficult to change in one year. Lenders will be looking at your last two years’ tax returns and recent pay stubs when you are ready to apply. They will also require that you have a two-year…