Buying a home is a dream of many families and the key to succeeding in today’s housing market is preparation. Even if you are a year or more away from beginning the homebuying process, there are some ways to help you be mortgage ready when you are ready.
Here is a look at five ways to prepare for the journey to homeownership.
Start saving for the main costs of purchasing a home. These costs may include the down payment, closing, appraisal and inspection fees, and moving expenses.
Decide how much home you can realistically afford. You can use a mortgage calculator or several tools that factor in your current debt and monthly payments for other expenses such as credit cards and student loans.
Check and strengthen your credit. Your credit score is one factor that will determine whether you qualify for a mortgage. Check your credit report and quickly dispute any errors that harm your score.
Explore mortgage options available to your financial circumstance. There are several mortgages available with varying down payments and eligibility requirements. These loans include conventional, FHA, USDA, Jumbo, and VA loans. Many states may even offer first-time homebuyer programs if you qualify.
Get pre-approved*. As you get closer to purchasing a home, a pre-approval will help give you a better idea of what type of loan amount you may qualify for when you begin the homebuying process. During the pre-approval process, your financial history (including credit) is evaluated to ensure you can get a home loan.
Most importantly, work with a realtor and a mortgage lender who you can trust. There are also several resources online that can also help you become an educated homebuyer.
*Pre-approval is not a commitment to lend.
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