Buying a home isn’t always a simple process. It’s definitely not an impulse purchase. It can take weeks to months from viewing a home to moving in. That isn’t counting the preparation needed before you apply for a loan. As a Murfreesboro mortgage lender, we deal with a lot of first-time home buyers. Our Accurate Mortgage Group team has some tips for what you will need before you take action to buy a home.
Checking Your Credit
This is the top priority before you get the ball rolling. Much of the mortgage process is dependent on your credit score, from how much you can borrow to what your interest rate will be. It’s what lenders will look at when determining how creditworthy you are. The higher your credit score is, the lower the interest rate you will typically receive.
The best thing to do is to get your credit report and go over it with a fine-tooth comb. If there is anything on it that doesn’t look correct, contact the credit bureau to have it corrected. Many homeowners think their credit is worse than it actually is, and correcting errors can bring your score up.
Go Over Your Finances
Before even looking at homes, you should figure out how much you can actually afford. There is nothing more disappointing than having a client fall in love with a home and then having to break the news that it is way out of their price range. So, to avoid those disappointments, know what you can comfortably afford so that you don’t waste time looking at homes you won’t be able to get approved for. There are a lot of sites that have free mortgage calculators that you can use, including our own, which you can access here.
Save for the Down Payment
If you want to get the best rates on a mortgage, you will need to make a down payment of at least 20% of the value of the home. The sooner you start saving for a down payment, the better off you will be when it comes time to buy a home. Of course, you can put down less than 20%, but doing this usually means receiving a higher interest rate.
Have Your Lender Pre-Approve You
Whether or not you have been in touch with a Murfreesboro mortgage lender, getting pre-approved for your mortgage can really help you with buying a home. It not only lets you know how much you can afford to buy, but it can also give you an advantage when putting in a bid on a home by proving to the sellers that you have the financing in place to make the purchase.
Don’t Make Major Changes or Purchases
When you are undergoing the mortgage approval process, the last thing you want to do is make any major purchases, such as a new car, furniture or applying for a new line of credit. It’s also best not to switch jobs during this time. Any of these actions will affect your credit and could end up costing you that home you wanted.
If you want more information on what to do before buying a home, give your local Murfreesboro mortgage lender a call today. We’ll get you on the right track!