We know you may be busy with getting ready for the holiday season. However, if you are planning on buying a house in 2018, now is the perfect time to get prepared. That way, when we ring in the new year, you can hit the ground running with your home search. So, check out our 7 steps to be ready to buy your dream home in 2018.
1. Check Your Credit Score
Your credit score is a numerical representation of your credit report. FICO scores range between 300 to 850 and the higher your score, the better. Good credit is definitely worth its weight in gold when it comes to mortgage shopping. If you want to score the best rate out there, you are going to need to have a score of 740 or above. The higher your score, the lower your interest rate, which can translate to thousands of dollars in savings a year.
2. No New Credit Cards
Opening a new credit card, especially around the holiday season, can be hard to turn down. With credit card companies wheeling out savings and special deals, you may not think these new credit cards will hurt you. However, these temptations could hurt your chances of getting a mortgage or at least the best interest rate.
When you open a new account, you have added another line of credit. That credit line, and what is borrowed, can change the application numbers and jeopardize the application. So, try not to overspend this holiday season, especially on impulse purchases.
3. Suggest Financial Gifts for the Holidays
Instead of getting gifts from your friends and family, suggest cash instead that will be put toward your new home. Also, remember that you may get some cash back on your tax return that you should also put in savings to go towards your new home.
4. Interview Potential Real Estate Agents
If your neighbor, relative, or friend happens to know a good real estate agent, that is great. However, you owe it to yourself to find the best agent and shop around. S&D Real Estate Services was voted to be the best Real Estate Office in all of Polk County in the Ledger’s Best of the Best contest. We have over 40 agents who are all friendly, qualified and chomping at the bit to find you the perfect home. Check out all of our amazing agents here.
5. Keep an Eye on Interest Rates
If you hear that interest rates are at historic lows or that they are on the rise, you should not assume that you can get the rock-bottom interest rate. Typically, not everyone gets the same interest rate on a mortgage loan since it depends on your financial history and the lender you choose.
6. Find a Mortgage Lender
Before you start your home search, find a trusted mortgage lender to find out how much home you can afford. If you have a bank that you have been with for years, you can ask them, or you can ask your S&D Real Estate Agent to refer you to a good lender.
7. Get Pre-Approved
When your lender goes over your financial history and gives you the coveted pre-approval letter, you are now ready to begin house hunting. To get pre-approved, you have to prepare these documents:
• Tax returns for the past two years/ W-2 forms for the past two years
• Paycheck stubs from the past few months
• Proof of mortgage or rent payments for the past year
• A list of all your debts, including credit cards, student loans, auto loans, and alimony
• A list of all your assets, including bank statements, auto titles, real estate, and any investment accounts
Once you have all this together and everything looks good, your pre-approval letter will be yours and you will be on your way to finding that perfect home for you and your family.
