Make the jump to Homeownership
As 2017 is winding down and 2018 is upon us many of you want to set yourselves up to home ownership in the near future! If you’re thinking about buying a home in 2018, November and December are the perfect time to “warm up” for the house hunt so you can hit the ground running in the new year. Most don’t know where to start and feel the task to be exhausting we are breaking it down for you in simple steps so that you can be ready to move when the perfect home comes along for you!
- Put those credit cards away – The holidays are upon us and many of us okay ALL of us overspend on the latest and greatest for the kids and all the family and friend get togethers. It is very tempting to throw it on a credit card and earn and churn some points seems like a good deal right? Wrong. Do not open that credit card to get 10% off your purchase because thats going to show as a new line of credit, its going to increase your debt to income, and possibly make what you can qualify for be much less or make your mortgage payment more depending on the effect it will have on your credit. Dont be tempted by all the great offers these companies have scale back this year because it will make next year worth it!
- Do not Buy any Planes, Trains or Automobiles – Thats right that new car that you want or maybe even need is really going to hurt you in the long wrong and possibly ruin your opportunity at Homeownership. Its only a 400.00 a month payment you say? Well tell your lender that when he runs your numbers all of your monthly payments will be figured into the equation when getting pre approved for a home loan. Just wait.
- Check that credit score -A credit score is a numerical representation of your credit report. FICO scores range from 300 to 850, and the higher your score, the better. Good credit is like gold when obtaining a mortgage,Typically, you’ll get the best interest rate on a loan if your score is 740 and above. But no worries if it is not. You can qualify with a score as low as 580 for most lenders. Start paying all your bills on time, and get your credit limit raised. Note, though, that you shouldn’t max out your card each month. It’s best to use 30 percent or less of your total available credit.
- Create an Emergency fund – Its great to have 6 month reserve fund for anything that may occur during your first few months as a homeowner and this is the perfect time to get going on that. Its the Holidays after all and gift giving is upon us. Instead of requesting that new TV, Speakers, or an Alexa ask for Cash to help you get into that new Home. And remember, you might be getting some money back after you file your tax return. Don’t blow it on vacation. A tax refund is a great way to add to your cash reserves quickly.
- Find a Mortgage Lender – Before you even start looking for a home (and yes, we even mean browsing online listings), look for a mortgage lender to find out if you can afford to buy a home. We can recommend a great lender for you to use that we use regularly as the lender is the key to this whole process. Its important that your using a good reputable lender that has many years experience and actually knows and understands the guidelines of each loan out there. Reviews are your best friend, see what others who have actually used the lender have said. Chances are if they have zero reviews or bad ones your not going to have a pleasant experience.
- Get Pre approved – When a lender gives your financials the once-over and preapproves you for a mortgage, you’ll be able to show sellers that you really can buy their house. But how do you get preapproved? By preparing a few documents, which you can do several months in advance of the actual purchase. Here’s what you need to buy a house.
- Current and Previous Addresses (2 years)
- Property Information (if applicable)
- Current and Previous Employment Information and dates including monthly salary
- Bank Account Statements
- Current monthly housing expenses such as rent and mortgage payments
- Address and Market Value information for properties you own, including taxes & insurance
- Sources and Income Amounts for all Borrowers. If a W-2 employee, pay stubs for the last 30 days It is advised not to change jobs, make big purchases, or miss any debt payments as you prepare to get a mortgage.