4 Steps to Prepare for Your Home Buying Journey
Are you preparing to buy a new home for the first time? The process of buying a home is very exciting, but it does require a lot of steps. Here are the first four steps you should take to get a jump start on your home buying journey.
1. Establish good credit
The first thing you should do in your home buying journey is establish good credit. Your credit score doesn’t have to be perfect, but It is almost impossible to get a home loan if your credit score is bad – or non-existent. The good news is, even with less-than-perfect credit, you do have options. It’s always a good idea to consult with a financial professional about ways you can either improve your credit score or get pre-qualified for credit if you don’t already have a credit history.
2. Find a realtor
Search for local real estate agents who are licensed and reputable to assist you in your home buying journey. Realtors will be of great value in giving you professional advice on the entire process, including how to start saving for a down payment & closing costs. Also, make sure you check with your state’s real estate licensing board to make sure the realtor you are interested in working with does not have any complaints or disciplinary actions against them.
3. Get pre-approved for a mortgage
During the pre-approval process, the lender will look closely at your income and credit history to determine whether to pre-approve you for a home loan. As a potential home buyer, obtaining a pre-approval letter from your lender can benefit you in several ways.
First, you will have the opportunity to discuss loan options with your lender based on your specific financial situation. Second, the lender will check your credit and let you know if there are any issues before jumping head first into the hunt for your dream home. Third, you will learn the maximum amount you can borrow, which will give you an idea of your price range. Lastly, a pre-approval letter will enable you to present a stronger offer on a home because you will be able to provide proof that you can finance the purchase.
It is important to remember that pre-approval does not guarantee you will get approved for a loan, and pre-approval letters are usually valid for only 60-90 days. Getting pre-approved through Herring Bank can help you enjoy a faster closing period, increase your negotiating power, and differentiate your offer from the competition.
4. Start searching for a new home
It’s likely that you already have an idea of what location(s) you want to live in, but once you get pre-approved for a mortgage, you can begin looking for your new home based on what you can afford. Your realtor will offer a lot of value in helping you find your new home but doing your own research will help you learn what you want in a home and keep an active eye on what is available. You can search the web for homes for sale in your area and narrow your searches by detailed criteria such as minimum and maximum price points and home characteristics.
The sooner you get started on these four steps, the closer you’ll be to buying your very first home.
Chat with a Herring Bank mortgage expert to discover how we’re lending the way to your next home.
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