When one decides, it’s time, for them, to find, a home, of their own, there are numerous challenges, and obstacles, involved! Unfortunately, far too often, the planning to procure the best home, for their needs, and financial abilities, even though, for most people, that house, represents their single, largest, financial asset, is inadequate! After over a decade, as a Real Estate Licensed Salesperson, in the State of New York, I believe, it would make sense, for potential homeowners, especially those buying their first home, to prepare, financially, adequately, and intelligently. With that in mind, this article will attempt to briefly consider, and discuss, a 7 – step approach, to proceeding, effectively, and in a prepared manner.
1. Get a copy of your personal Credit Report: At least 6 months, prior to, beginning your house – hunting, get a copy of your personal Credit Report, and review it thoroughly. Take steps to correct any errors and/ or mistakes, in order to be as prepared, as possible. This can, either be done, by yourself, or, one can take advantage of using professionals, who might do so, for you! Remember, the better your report and credit score, the better your mortgage terms, and ease of securing the best one, for you!
2. Correct, fix and address: Don’t merely get a copy, but correct it, if needed, fix any deficiencies, which might be detrimental, and address any issues, or potential ones. Again, you can do so, yourself, or use the assistance of a professional!
3. Save as much as possible: Be prepared with the necessary funds for your down – payment, as well as any other funds needed, for Closing, In addition, begin to accumulate as much of a reserve, as possible, in order to maximize your enjoyment, and reduce the stress!
4. Do not open any new credit: Often, when we shop, the store offers their Credit Card, and informs you, there will be a discount, if you do, so! However, this is a false – savings, because opening any new credit card accounts, might negatively impact your overall Credit Rating!
5. Re – pay, as much debt, as possible: Mortgage lenders use a formula, which weighs the ratio of your income, to overall debt. Therefore, if you re – pay, as much of your other debt, during this preparation period, as practical and possible, you will enhance your personal credit!
6. Accumulate down = payment, and reserves: The better prepared one is, the less stressful, this period of time, is! Be prepared, with sufficient funds, for the down – payment, closing costs, and reserves.
7. Use a quality mortgage banker/ broker: Discuss your situation, needs and requirements, as far in advance, as possible, with a professional mortgage banker or broker. This individual should be able to provide quality, relevant advice, which will position you, properly!
Using these 7 steps, is a great starting point, in your home – buying process! The better prepared, the easier and simpler, the process!