Preparing to Buy a Home

Is buying a home one of your 2023 Goals? Even if you're not ready to start house searching just yet, here are a few things that you should be thinking about now to make your home buying process easier...

• Increase your credit score. Before you start searching for houses, agents, and lenders, work on increasing your credit score which can improve your ability to get a great mortgage. Credit scores range between 200 and 850, with scores above 620 considered desirable for obtaining a mortgage. (For tips on improving your credit score, check out our blog post Improving Your Credit Score)

• Figure out how much home you can afford. Take a look at your monthly income and your monthly bills to see how much money you can spend on a mortgage. Don't forget to calculate for things like homeowner's insurance, utility bills, property taxes, and a budget for home improvements and repairs. Once you figure out what you'd be comfortable spending, you'll be better prepared to talk to a lender.

• Think about your wants versus your needs. When thinking about your ideal home, don't forget to consider commute time, school districts, distance to friends or family, and neighborhood attractions in your search list. If you work in a city and value a short commute time, you may have to sacrifice having a larger backyard. But being down the road from a neighborhood park may offer a great compromise. Start looking at homes online and see what features you like, love, and absolutely do not want. You may think you want a certain style of home only to realize that it does not work for your family. And consider what home improvement projects you'd be willing to tackle yourself versus the ones that you would need to hire help on.

• Find a lender. Take the time to talk to different lenders to find the best mortgage for your particular situation. Different lenders may be able to offer you different loan packages or rates, so shop around to make sure you understand the process and what is available to you.

• Get a pre-qualification or pre-approval. Once you're ready to start searching for homes, make sure you get a pre-qualification or pre-approval letter from your lender. Many real estate agents will want to see that pre-qualification before you start your home search so they can stay within your budget. A pre-qualification letter will be a basic overview of your ability to get a loan and can be done without submitting all of your financial paperwork. A pre-approval will be more in-depth and will require you to submit bank statements, tax returns, credit scores, and other financial information to your lender. While neither letter guarantees that you will get a loan, they are a reliable indicator of your ability to buy a home.

• Speak with real estate agents. Get recommendations from family, friends, and coworkers. Take the time to contact a few local agents and see if they would be a good fit for you. You and your agent may be working closely together for several months, so you want to make sure it's someone you communicate well with and get along with.

Once you have a lender and a real estate agent to work with, you're ready to start your home search! Remember, buying a home is likely to be one of the biggest financial moves you will make in your life. Make sure you prepare yourself for the process and find a lender and real estate agent that can support you through it. 

Have questions on the next steps to take? Call our team at (434) 214-6121 to learn more about the process and how New Leaf Team can help you with your home search.