If you’ve been on the market for a new home, you may have been taken aback in recent months as the cost of houses rapidly increased. For many people, that’s been a game-changer as it’s pushed their timeline for buying a new home out further than expected.
If this has been the case for you, you certainly aren’t alone! But, while you may be postponing the house-buying process for a little while in the hopes that house prices will moderate, there are steps you can take now to prepare.
Here’s where to begin to prepare to buy a home:
Check your credit. This is an important step to take far in advance of purchasing a house. If you don’t regularly check your credit reports and credit score, now’s the time to do so. Review your report for any errors and reach out to the credit bureaus if you see any inaccuracies.
Work to improve your credit. Weren’t so pleased with your credit score when you checked it? Get to work on improving it! There are many steps you can take to improve your score, but the most important is paying your bills on time—every single time. It’s also important to work on paying down your debts. Once a debt is paid off, don’t close the account; keep it open to show credit capacity.
Know your debt-to-income ratio. We previously mentioned that you should work on paying down your debts, and here’s why that’s important, from a house-buying perspective: Your DTI is a key criterion considered when obtaining a mortgage loan. You want to keep the percentage of your monthly income that goes toward debt repayment as low as possible.
Nail down your budget. At this point, you can go ahead and obtain your pre-qualification for a mortgage loan. This will help you gain an understanding of how much house you can afford. That way, when you’re ready to start looking at houses again, you can narrow your search to only look at homes that are within reach.
Explore options and features. This is the fun part! Having extra time before buying a house isn’t a bad thing as it allows for more time to identify the features you want and need in a new house. Take a look through magazines and websites to determine what you’d love to have in your house.
Ready to get pre-qualified for a mortgage loan? Get in touch with us today to get started!
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