Many people are making it their New Year’s resolution to buy a new home for the new year. It’s a great time to buy, with interest rates still near all time lows. In fact, it’s never been more important to own a home. It’s an investment in your future that will grow in value. The home that you guy today will be worth more in the future. A lot of people ask us how to buy a home in 2019, and it’s not as complicated as they think.
Step 1: Fix Your Credit
If your credit is a mess, you’re going to have a harder time buying a home. We went through this in depth in a few different posts but the basic idea is to start paying your bills on time. Building good credit isn’t a one-step process, but you can do it if you’re dedicated.
Start by paying all of your bills several months in a row. Not missing payments raises your credit all by itself. Then start to work on your debt-to-income ratio. Start paying down your credit card balances and reducing your debt. Don’t make giant purchases like cars or appliances if you can avoid it.
Next, check your Equifax, TransUnion and Experian credit reports. Look for errors or misreported problems on your credit report. If there are, they need to be fixed ASAP, because mistakes can doom your bid to buy a house.
Then look for legitimate problems and fix them. If you have paid off a late payment, contact the creditor and ask them to remove the late payment from your records to help improve your credit score. The basic idea is to make your credit score as clean as possible to ensure that you get the best rate on your mortgage.
Step 2: Get Pre-Approved For Your Mortgage
When you start shopping for your mortgage, it’s more important than ever to be pre-approved before you get into the process.
Competition is FIERCE for these homes right now. The best way for you to get an advantage at the negotiating table is to get pre-approved. That way, you can drop a legitimate offer on the table and win any bidding war with people who aren’t as ready as you are to buy a home.
With so many people shopping, you need to know your range before you get to the open house so you can bid confidently and not waste both your time and the seller’s time.
A mortgage pre-approval is a monster weapon to have in the fight for your dream home. Don’t go into that negotiation unarmed.
Step 3: Shop Smart
After you are pre-approved and your credit is clean, it’s time to really get into the home shopping process. You can look on a variety of places, from Zillow or Realtor that have listings. You could call a real estate agent and have them show you available properties in the area. However you shop, it’s imperative that you find the RIGHT home. Don’t just buy A home. Get the home that you want. This is the largest financial transaction of your life to this point. Don’t settle.
However, that doesn’t mean to get outside of your comfort zone. You may qualify for a $500,000 mortgage, but that doesn’t mean that you can comfortably afford it. Make sure that your budget lines up with the home that you want to buy. We can help you by showing you how much your mortgage payments will be, so you can see how it stacks up against your current situation.
Call The Home Loan Expert Team in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515, Nashville at (615) 810-8555 or Birmingham, AL at (205)721-7656. You can always apply online at hero.loan for your VA Loan, and www.thehomeloanexpert.com for your other mortgage needs, and we’re also open on Saturdays and will come to you to help close your loan. We work hard to make it easy on you. Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?