For many, the process of buying a home has been brought to a screeching halt this year, with the devastation that COVID-19 has wrought on the global economy, including the housing market. Still, there is hope for new home buyers, and many believe that the market will recover quickly. With the confidence of mortgage professionals like Rex Homes in mind, you should continue preparing to purchase your dream home this year. Here’s how to prepare yourself for that life-changing decision.
- Monitor Your Credit Score
Many people underestimate the significance the credit score has in the home-buying process. This factor determines what loans you will be approved for and your eligibility for decent interest rates. Strengthen your credit score by paying down debt and disputing any present errors on your report far before venturing into house-hunting.
- Determine a Budget
Having a budget from the very beginning will keep you from shopping outside of your means. This is where you must do your research into the current housing market and determine what price range is suitable for you. Make use of mortgage calculators as you get a better idea of what you can afford (and what you’re willing to spend).
- Choose a Down Payment Amount
Down payments are of great importance, as they play a direct role in determining the amount of interest you’ll be paying on your home loan over the years. Most lenders prefer a 20% down payment, but if you cannot afford that, there are plenty of plans for lower payments – you may even be eligible for a zero-down option.
- Gather All the Necessary Documentation
When you’re ready to purchase your dream home, there will be several different documents required to confirm your eligibility. You’ll want to begin gathering them early on, as some may take more time to acquire than others, and you’ll need some time to resolve any errors that may come up.
- Get Pre-Approved
Getting pre-approved by a lender will help you to solidify your budget. You may have a certain limit in mind, however, when your debt, credit, and many other financial factors are taken into account, lenders may approve you for less than what you had planned. A pre-approval letter will help you to get a better idea of what you should be expecting in terms of your home-buying ability.
- Shop for Your Dream Home
Now that you’ve got all the key documents and financial decisions squared away, you’re ready to go shopping for your dream home! You know what you need in a home and how much you’re able to spend on it, so look at what’s on the market in your preferred location and home in (no pun intended) on your house of choice.
- Work with a Mortgage Professional to Make an Offer
With a good mortgage professional by your side, you won’t be blindsided by all the hidden fees that come along with the home-buying process. You’ll be prepared to make an offer that does not compromise your determined budget, and before you know it, you’ll be moving into your dream home! Contact a mortgage professional today to get started.