Buying a home takes a lot of preparation and planning and it’s important steps to do [and not do] before you even start house hunting!
Whether you think you might want to move in the next few months or even a year from now, so start prepping and planning today.
Here's my list of "Do's" and "Don'ts" to help you stay on task and get you ready to buy in no time!
The Do's of Home Buying
1. Get to know the area.
I suggest to my buyers to think about "what kind of activities do you like to do or what places do you want to be near?" Whether that's farmer's markets, your favorite park, your family, a certain highway, whatever.
Jobs and school assignments can change frequently, so pick a location that fits your long term lifestyle. If immediate school ratings are important to you though, check out independent resources: Niche.com or GreatSchools.org
If you love a particular neighborhood or area, I suggest driving or walking around it, so you get a true sense of living there. Plus, in our market, certain areas have certain types of homes.
For instance, North Raleigh will have more established neighborhoods since the 70s whereas Apex homes are more new. Anywhere around our major universities or downtown areas are not going to have huge lot sizes, whereas, 15 minutes out could get you an acre. It just depends on where you are looking and what you are wanting in your new home.
This time spent “scoping out” the area and the types of homes built there provides a reality check and will make you more efficient when it comes time to really house hunt!
2. Get Your Finances In Order
Buying a home is probably THE biggest expense you will ever have in your life. You want to be a responsible buyer and homeowner, so now is the time to focus on your finances.
Your FICO credit score and cash on hand is your gateway to a getting your offer accepting and getting the best mortgage rates.
Check your FICO Score
Lenders use your FICO score to determine your risk as a borrower--the higher your score, the better your loan options.
This applies to couples too! BOTH of you will need to work on your credit.
Check your score here and ONLY here: https://www.annualcreditreport.com/. This is only Federally authorized site to check your scores and you're entitled to one free check annually.
It can take 6 months or more to improve your score, so start today.
Save Those Pennies
Whether you do 3% down payment or a conventional 20% down loan, lenders still want to see if you have enough cash reserves in the bank.
Plus, I need to know that you have enough cash for the offer-related and pre-closing expenses such as the Due Diligence Fee, the Earnest Money Deposit, appraisals, inspections, etc.
That's right. There's pre-closing expenses AND there's closing costs.
These are two different things and both need to be considered when thinking about the cash you need on hand to get to the closing table.
The typical rule of thumb for closing costs is to expect 2-3% of the offer price.
So cut unnecessary meal deliveries and online shopping and save, save, save.
3. Reach out to me.
Not only does having a formal buyer's consultation get you prepared for the process, but it allows us to get to know each other and make sure you have an advisor standing by when you have questions.
I pride myself in offering guidance along the way and it's never too early to reach out.
Do you have current home to sell and looking for preparation guidance?
Do you want to get connected with a lender that offers the loan options you're looking for?
Do you need advice on timing?
Should you focus on new construction or resell homes?
These are commonly asked questions I get from folks starting to think about home buying in the next year.
The Don'ts of Home Buying
Here are the some risky actions that you need to avoid in could derail your ability to get a mortgage loan. Ignoring just ONE of these items can ruin your chances for qualifying for the loan you want.
1. Don't change jobs, become self-employed or quit your job.
2. Don't buy a new car, truck or van (or you may be living in it)!
3. Don't use credit cards excessively or let your accounts fall behind.
4. Don't spend money you have set aside for pre-closing expenses or closing costs.
5. Don't omit debts or liabilities from your loan application.
6. Don't not buy new furniture.
7. Don't originate any inquiries into your credit.
8. Don't make large deposits without checking with your loan officer first.
9. Don't change bank accounts.
10. Don't co-sign a loan for anyone.
As you can see, you should start planning today if you want to buy a home this year. You’ll be a more informed buyer and borrower, and will be ready to purchase a new home with confidence and less stress!
And remember, no matter what you think might be an obstacle in your way right now, still feel free to reach out. I’ve most likely helped a past client overcome the same hurdle before and I’d love to help you too!