Buying a house is a big financial step in your life. In fact, it is probably the biggest financial decision you will ever make. Most people never make a purchase that exceeds the cost of a home – so, it should go without saying that you need to be prepared. By getting your financial life in order as soon as possible, you will be in a better position to secure a mortgage for the home of your dreams.
So what steps can you take in advance of the home buying process? There are a few helpful things you can do.
Okay – so this is probably a pretty obvious place to start, but it needs to be mentioned nonetheless. Buying a home is expensive, and you are going to want as much cash on hand as possible. Yes, the majority of the home purchase will be financed, but you are still going to need cash for a down payment, moving expenses, and more. Put away as much money as you can each month to take some financial stress out of the situation.
Check Your Credit Score
This is a key point. As soon as you decide that you are interested in buying a new home, you should check your FICO credit score to see where you stand. Hopefully, you are already in a healthy range for home buying – if not, there are steps you can take to improve your standing before you actually apply for a mortgage. You don’t have to do anything crazy to improve your credit score, you simply need to be responsible. Don’t use your credit cards excessively, pay off the balance each month, and always make on-time payments. If you can manage to position your score in the mid-700s or higher, you will be in great shape to receive a fair interest rate.
Don’t Apply for Other Forms of Credit
As you go about your day-to-day life, you probably encounter plenty of opportunities to apply for credit accounts. Whether it is a retail store trying to get you to apply for their card, or an offer in the mail suggesting you switch and transfer your balance, taking the bait on one of these offers can hurt your chances of getting a mortgage. Once you know that you will be buying a house, the best thing you can do is streamline your financial life. That means no new credit accounts for the time being.
Find a Real Estate Agent
This last tip doesn’t necessarily have anything to do with your financial life, but it is still important. Working with an experienced real estate agent like Dan Hozhabri – who has vast knowledge about the Maryland area – is a valuable asset in the home buying (and selling) process.
By taking some simple actions to get your financial life under control and organized, you can be ready to close a deal when the right house comes along. Good luck!