Steps to Take if You’re Buying a Home in 2018
Thinking about buying a home? Now’s the perfect time to do it. Trulia.com has teamed up with real estate and mortgage professionals to get their input on what homebuyers should to do prepare for buying a home.
Here are some steps to take:
- Find a Lender
The first thing to do before looking to buy a home is to get a mortgage lender. How do you find a lender? Well, for the most part your real estate agent, will probably already have one to recommend to you. If not, ask your bank that you’re with, compare the two and see which one is best for you.
- Get Preapproved
Once you get preapproved for a mortgage by a lender you’ll be able to show sellers that you can afford or buy their home. You can do this months before you actually buy a home, in order to get pre-approved you will need a few documents.
- W-2 Forms for the past two years
- Paycheck stubs from the past few months
- Proof of mortgage or rent payments for the past year
- Tax returns for the past two years
- A list of all your debts, credit cards, student loans, auto loans, and alimony
- Assets, auto titles, real estate, and any investments you own.
It’s best to not change jobs, make big purchases, or accumulate anymore debt while in the processing for buying a home.
- Check Your Credit Score
Your credit score is going to be important when it comes to getting a mortgage loan. FICO scores are from about 300-850. The higher your credit score is the better interest rate on a loan you will get. Scores lenders usually like are 740 and above, even if it’s a couple points off, this can change how much money you’re saving by thousands of dollars. Before buying a home, make sure your credit is in good condition!
- Don’t Open Any Credit Cards
Opening a new credit card has a big change of hurting you from getting a mortgage or a good rate of loan. When you open a new account, you’re creating another line of credit, meaning you’re borrowing more money. Wait until after you’re done with the home buying process to open any new credit cards.
- It’s Tax Season, Save It!
Tax season is here, most likely you’ll get some money back after you file your tax returns. Don’t spend it, instead, save it and use that tax refund towards a down payment for your new home.