Buying a new home is on a lot of people’s list of things to, but few actually know the proper steps required before you can do so. Getting your priorities and credit in line before browsing the real estate market for a new home will save you money not only now, but in the long run. Follow these simple steps to make sure you are on the right track to when searching the real estate market for a new home.
Credit Report Card
You should startd checking your credit report card several months to a year before you plan to buy a house. Many people searching the real estate market for a new home are disappointed to find that there are mistakes on their credit report. For those with known issues on their credit reports, you should start repairing said issues six to nine months in advance.
Develop a Savings Plan
Many people looking at homes for sale or working with a home builder neglect to consider the amount of money they will need to put down. Modern home designs can make your home look state of the art, but they cost more money in the long run rather than traditional home designs. If you have a master planned floor plan, you can expect to pay more than you would for a generic floor plan. Taking all these things into consideration when you start saving can help you avoid surprises later.
Have Plenty of Trade Lines
Conventional loans prefer that you have three trade lines open. These include things such as car loans, student loans and credit cards. These loans should be active and should have been active for the past year to year and a half. If you prefer to try for an FHA loan then two trade lines should be opened. Those who have more should be fine, but those who have fewer probably will not qualify for a mortgage.
Don’t Close Accounts
You should keep the older credit accounts open despite the fact that they are not used all of the time. These accounts continuously add positive points to your credit score. Use those accounts every few months while paying the balance in full so that the accounts stay open and active, and these will help boost your score.
Don’t Open New Accounts
Credit bureaus do not know how you will handle new credit or where the money for the new credit will come from. Opening multiple accounts within a few months can make you appear as more of a risk factor rather than someone worth taking a risk on. Many times when you open a new account it can take months for it to have a positive impact on your credit score, but the immediate impact of pulling your credit to open that account may not be worth it.
Decide on Your Budget
A lender will help you determine how much you can afford, but only you can decide what your maximum is. Figure the maximum amount you can afford each month and stick with this amount. This will reduce the chances of you wasting time walking through houses which you fall in love with, but are out of your price range and you could never afford. Determine what things matter most in your house, such as rooms, square footage, garages or acreage. These things will help you find the right house within your price range and save wasted time looking at houses that don’t match your needs or wants. Many survey responders deemed central air, storage, space, laundry rooms and certain appliances as a top priority when it came to home shopping, so determining your needs and wants first will help you stick with your choices.
Take your time and make sure all of your finances are in order and decide exactly what you want in a home, and then you will be ready to research the real estate market for a new home which matches your needs exactly personally and financially. You will living here for many years to come, so a payment you can afford and a space you love is worthwhile when it comes to your new home.
