Are you getting ready to buy your very first home? Buying a home is a very exciting experience and it’s not something you should take lightly. In fact, your home may be the most expensive item you ever purchase!
It can be absolutely wonderful to realize that you could be paying less each month to own a home than you pay to rent. But the process of preparing to buy a home is rather complex and there are many points to consider. So where do you begin? Generally, most people will need to tend to the following preparations:
Collect your pay stubs and other income records. You’ll need to provide proof of income. The longer you can prove a stable income, the better your chances of obtaining a home loan.
Obtain your free annual credit report from each of the national credit bureaus: Equifax, TransUnion and Experian. Then, carefully review these reports to ensure they’re accurate and free of any errors. (Yes, errors do occur!)
Evaluate your credit score. Is your credit score good enough to secure a home loan? If you’re married, placing a spouse’s name on the mortgage can sometimes help you get a better rate (though in other cases, it can prove harmful, if they have a lower credit score.) If your credit score is less-than-perfect, it may be a wise idea to wait at least 6 months to give yourself some time to boost your credit score by paying off high balances and making on-time payments.
Evaluate your ability to make a downpayment. The amount that you can put down on a new home can have a significant impact on what options are available to you as a borrower. Of course, the more you can put down, the better. Evaluate how much you can put down relative to the home prices in your area to get an idea of the percentage that you can put as a downpayment.
Before you go home shopping, it’s typically best to secure financing. Remember, there is a major difference between pre-qualification and pre-approval. Pre-approval requires a bit more time and paperwork, but it gives you a much greater certainty of actually obtaining a home loan and as a result, it can provide you with a valuable bargaining chip when it comes down to negotiations with a seller.
If you’re ready to get a home loan, wish to refinance or require help getting on the path to home ownership, contact Sonia Krietz, with Security National Mortgage Company.
You may wish to complete the pre-application form and Sonia will be in touch to help you proceed through the process. If you have any questions or concerns, you can also contact Sonia Krietz by phone at 916.385.9716.