Are you thinking of buying a home sometime in the future? Here are the most important things you can do now to prepare for the big event, whether it’s six months or a year down the road:
Order a copy of your credit report and your credit score. For a free copy of your credit report, go to AnnualCreditReport.com. Each of the three credit-reporting agencies are required under federal law to provide you with one free credit report annually. Look for any inaccuracies and any areas you need to work on. Your credit score won’t be free, but it’s important to know what that is, too. (If you’re married, both of you will want to order your scores.) Go to MyFico.com for your credit score. Borrowers with credit scores above 740 have the easiest time qualifying for a home loan and will get the best rates. When you order your score, your three-digit number is provided along with factors that you need to work on to increase your score.
Start saving as much as you can. Nothing gobbles up cash quite like buying a home. You’ll need money for your down payment, closing costs and any improvements you need to make before moving in. Depending on how far away you’re relocating, there are moving expenses as well. An older home may need some paint, new flooring or other upgrades. Even if you’re buying a brand new home, you’re going to have to pay for window coverings and other items after you move in. Having enough money can make buying a home and moving into it much less stressful.
Figure out how much house you can afford. Once you have some money saved and have worked on improving your credit score, visit a lender. They can give you an idea if you qualify to buy a home and if so, how much of a house you can afford to buy. Don’t go out looking for homes until you know the price range in which you can buy.
Once you have your financing lined up, it’s time to find a Realtor who can help you find the best home for you and your family. The steps you take now will make the whole process a whole lot easier when that time arrives.