Does your 2017 agenda include the purchase of a new home? Well, in this case, you should start making preparations for that moment, because 2016 is just about to end. So, you’d better get used to the idea that you don’t have that much time until 2017 and you should get ready to find the house of your dreams.
If you are not sure what to expect in the coming year, the following steps were made to help you out. You are about to find out everything you need to know to be prepared for buying a home next year.
1. How is Your Credit Score Looking?
If you want to get the financing you need for buying the house of your dreams, you need to see how your credit score is looking. The higher you score, the better for you, because the chances to get the financing you need is more likely to happen. Also, people that score high on their credit score enjoy a better interest rate as well, which gets translated into a smaller mortgage rate.
So, there are plenty of reasons to check your credit score. If you will score low, don’t panic. Instead, start doing something to repair it. How to do that? Check if there are any errors in your report, pay all your bills in time, and try to spend 30% or even less from the credit you have available.
2. Stay Away From New Credit Cards
No matter how tempting it may be to open new credit cards, now that the winter holidays are approaching, don’t do it. For every credit card, you open, you will also open another credit line. This will be to your detriment when trying to get a mortgage or even to get a better loan rate.
Even if it is tempting to save money with new credit cards for holiday shopping seems a great idea, try to resist it, because this decision will save you from a lot of trouble when applying for a loan. Why minimize your chances to get the house you want just to save a few dollars now? So turn down every offer to open a new credit card.
3. Cash Would Be the Best Gift
Purchasing a new home means a lot of costs to consider, so you will need to start putting money aside. There are moving costs, closing costs, and not to forget about the down payment you need to have in mind for your future home.
Also, you should consider having funds for unexpected repairs, renovations, and other operations to your new house. So, next time someone asks you what you want for Christmas, suggest them to give you a financial gift instead of any other gift. Also, don’t forget to file a tax return, because this means more money that can be set aside.
4. Start Looking for Agents in the Real Estate Domain
It may be time to ask friends and family to recommend the trustworthy real estate agent. If you know someone that is a real estate agent or you know someone that knows a real estate agent, you should meet for a coffee and get to know the person. As the end of the year is approaching, real estate agents will have more spare time to sit down with you and talk about what you need. This way, you can see what type of person the agent is and if he or she has sufficient experience to help you all the way to closing a favorable transaction.
5. Keep an Eye on Interest Rates
You should know that the price of the house you are going to purchase is not the only one negotiable. Interest rates will vary as well, depending on many factors. The lender you choose to work with and your financial background can be two factors that will dictate the interest rate you will get.
But, it is a great idea to look around and see what the interest rates are. See who can offer you the best ones on the market. Also, do be aware of the fact that closing costs can vary as well.
So make sure you talk with your real estate agent about this matter and see if you can find efficient solutions to keep them as low as possible. You still have sufficient time to see how you can keep costs down and safe some money.
6. Start Looking for a Mortgage Lender
The best thing to do before you even got the chance to look for new homes, is to find a mortgage lender that will help you out financially. You need to see just how far you can do when it comes to mortgages, to see what houses you can afford to buy.
This should be done upfront so you can save all that disappointment in case you find a house you love but don’t have enough funds to get it. If you’ve been working with a bank in the past years, go ahead and ask them for a mortgage offer. Also, the real estate agent you’re collaborating with can also pinpoint a few great lenders.
Just make sure to check out several offers, to see the costs, offer, and closing conditions. Once you know how much you can afford, you can start hunting for the house of your dreams.
7. Proceed for Getting Preapproved
It is great to already be preapproved for a loan when you start looking for a house because showing sellers this aspect turns you into a serious client. To get preapproved you will need to take care of some documents required by the lender for this step. You will need to present the tax returns for the past two years, the W-2 forms for the same period, paycheck stubs afferent to the past months, proof of payments for rent or mortgage that were made in the last year, and a list of various debts and assets, as required by your lender.