Ready to put your rental days behind you and march right into home ownership in 2015??
It’s a great time to start preparing for that process. Even if you won’t be ready to buy for a few months, the following steps with get your started on the right foot!
1. Check your credit
Go to Annual Credit Report and request free credit reports from all three credit reporting bureaus: TransUnion, Equifax and Experian. For a small fee, you can also get your credit score.
First – check the reports thoroughly for any errors that need correcting and any negative information.
These reports should also indicate what you can do to improve your credit. A higher credit score makes it easier to qualify for the lowest interest rates, which in turn make your purchase more affordable.
2. Start saving
One trick is to save the difference between your rent and what you estimate your mortgage payment will be—or more. You’ll need cash reserves to buy a home, and you’ll need to prove to a lender that you can afford housing payments that may be higher than what you’re currently paying in rent.
3. Earn extra cash
If you’re low on cash, as most first-time buyers are, consider taking drastic steps to cut spending. Or try out some ways to increase your income, such as selling some of your stuff or taking a part-time job.
4. Start looking at neighborhoods
Unless you already know where you want to live, take the time to visit a variety of potential towns and neighborhoods. You’ll want to scout out neighborhoods that meet your needs in terms of transportation options and other amenities. Exploring different locations will help you narrow your priorities.
5. Consult a lender
The sooner you visit a lender, the quicker you’ll know what you can afford and the steps you need to take to improve your credit or generate more income. They will have valuable information on current government programs, rates, and financial assistance opportunities.
6. Investigate down payment assistance programs
Visit Down Payment Resource to learn about programs in your area that may help you find down payment money or a low-interest loan.
7. Attend a seminar or take classes on buying a home
Lenders and agents often offer free seminars that explain the home-buying process. Many local government and nonprofit agencies also offer classes that can help you prepare for the financial responsibility of owning a home.
8. Decide how much you want to spend
A lender can give you an idea of how much you can borrow, but you have to create a personal budget to decide how much you will be comfortable spending on your mortgage payment.
9. Contact your REALTOR®
Your Realtor® can set you up with daily emails on properties that are available in your price range, area, and with your preferences.
10. Drive by homes you find appealing.
Some homes may lose their appeal from the curb while others make you want to view them immediately. Your Realtor can arrange showings and set you out on the path to home ownership!
Consider following these 10 steps and you will be well on your way to Home Ownership in 2015!