Buying A New Home: How Should I Prepare?
When you’re considering buying a new home, the process can seem overwhelming. Where should you even begin? The process can be confusing and seem daunting to get started.
We have some tips on what you should do to jumpstart the process and get on the road to purchasing a home:
Strengthen Your Credit Score
Getting the best interest rates available will depend largely on your credit score. A credit score of 700 or more should get you a good rate while being over 750 should allow you to get some of the best rates available.
One good idea to help your credit before buying a home — don’t apply for a new line of credit within a year before applying for financing.
Know What You Can Afford
One general rule of thumb with purchasing a house is that you shouldn’t spend more than 30 percent of your monthly net income on a house, but this is far from exact.
If you’re not ready for the pre-approval process, one way to figure out a ballpark figure that you might be able to afford is a mortgage calculator. It can produce what you would expect to pay monthly on a house, but it still depends on the net monthly income for the person or people purchasing the house.
If you want to create a budget, you can use our mortgage calculator tool here or read more about mortgage calculators to know how they work and can make the process easier on the buyer.
Don’t forget about closing costs, either. These can sneak up on buyers in the end, so it’s best to plan and begin to save so you have the money ready for them.
Pre-approval is Key For Buying a New Home
Starting to shop for homes without being pre-approved can lead to disappointment in the end. It’s best to start with the pre-approval process, figure out how much of a house you can comfortably afford and then begin looking after that with a pre-approval letter in hand. Ignoring the pre-approval process means you can get excited about houses for sale that you might not actually be able to afford.
The pre-approval process goes through a preliminary credit review and credit check to give let you know how much you can afford to spend on a house. It can also give you some leverage during the negotiating process when you find the home you want because it shows the seller that you are financially capable of buying the home.
Chris Doering Mortgage can walk you through the home buying process, starting with the very first steps. We can pre-approve customers for home buying and explain every step along the way. Call us at 352-244-0840 or send us a message from our website.