Buying a new home can seem like an endless series of things to do and remember. Even after you get through the entire process, you sit at the closing table signing your name over and over again. Of course, at the end, you’ve got a beautiful new home to call your own and a future to plan. But before that wonderful moment, there’s a lot of stress.
If you’re planning to buy a new home this year, get ready now and make the process easier on yourself when you’re ready to start looking or put in an offer.
- Get a copy of your credit report. You’re entitled to a free copy from each credit bureau once a year.
- Check your credit report for errors and begin the (long) process of disputing them.
- Take care of old, forgotten debts that could be dragging down your report.
- Start paying down your debt. You don’t have to pay it off completely but lowering your debt-to-income ratio helps.
- Monitor your credit score. The higher your score, the better your interest rate. Many banks and credit companies offer this service free, and it doesn’t ding your credit.
- Add to your savings. You almost never have as much as you need and a lender wants you to have money left over after you pay closing costs.
- Get realistic about your budget. You may want the bigger house, but can you really afford it?
- Check to see if you qualify for programs if you’ve never owned a home or if it’s been several years since you have. First-time homebuyer programs and FHA loans may be available.
- Talk to a lender. You don’t need to apply for a mortgage right now but get an idea of what you need to do to get the best rate, what loans are available, and how much home you may be able to afford.
- Start cleaning out your closets now. The less you have to pack and move, the better. Think of it as an early spring cleaning.
- Think about what you want, need, love, and hate in a home.
- Make a list of everything you definitely want, can live without, or need. This includes type of neighborhood, commute, schools, and other details besides square footage.
- Think about your future. Are you about to have kids or send them off to college? Do you want a home that will be with you through those changes or will you move again?
- Feel free to begin looking – online or in person. You may not be ready to put in an offer but you’ll get an idea of what’s available, especially in your price range.
- Start looking for your Realtor®. Now is a good time to look around and figure out who you’d like to work with. Talking to a Realtor® doesn’t cost you anything, and a good real estate professional won’t pressure you into anything you’re not ready for.
When you begin the homebuying process knowing what you can afford and with an idea of what you’d like, some of the hard work is already done. After that, it’s a matter of looking around, narrowing down what matters most and what doesn’t, and putting in an offer. With inventory as tight as it is, it’s best to get ready early rather than later. Once you do, you can focus on finding the home of your dreams and negotiating the best offer.
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