With the new year comes new goals to accomplish, and for many that can be the dream of homeownership. If your goal is to purchase a home in 2017, follow the steps below to make sure you are on the right path to completing your goal in 2017.
Step 1: Automate Your Down Payment Savings
Financial advisors commonly agree on one simple rule when it comes to saving a large sum of money for something like a down payment on a home – pay yourself first.
What does it mean to pay yourself first? It means automating your banking situation so a set amount of money goes into a savings account designated for a specific purpose. The idea is that placing money in a separate account automatically removes the temptation to spend it and removes the extra step of transferring it manually. Also, if you never see the money in the first place, then you won’t miss it or spend it.
Step 2: Check your Credit Report
When it comes to securing a mortgage for your home, few things matter more than the information found on your credit report. To avoid any surprises during the buying process, check your credit report as early as possible in the home buying process.
A good credit score is important because it can influence your mortgage rate, with a better credit score typically leading to a better mortgage rate. A small difference of 1 percent in a mortgage rate may not seem like much, but the cost of the additional 1 percent throughout a 30-year mortgage can be a significant expense.
In addition to checking your three-digit credit score, examine the report carefully to be sure it is free of any errors. Commons errors include incorrect cards being associated with your name, delinquent account flags, and incorrect personal information. Sometimes having the mistakes fixed and rectified can take a significant amount of time, which why it is important to identify them early in the home buying process.
Step 3: Get Pre-Approved for a Mortgage
Getting a preapproved mortgage loan is a step that serves two important purposes: It certifies you have the proper financial resources to undertake the purchase of a home and it helps to set a realistic picture of your budget.
To get preapproved, a financial lender looks at items such as tax returns, W-2 filings, debts, employment history and more. Upon review of these documents, a mortgage lender will then preapprove the maximum amount of money they will lend you.
Getting preapproved is important to complete early because it can help to reset your home price expectations. You may think you can afford a $350,000 home, but you may only get preapproved for $250,000. Understanding the amount of money you can spend helps to save you the time of looking at homes that are vastly out of your price range.
Step 4: Keep Your Money Where It Is
It sounds obvious enough, but many potential homebuyers make the common mistake of deciding to rearrange their finances before purchasing a home.
Moving around large sums of money can be a critical mistake that affects your credit profile unknowingly. An erroneous credit profile can take time to rectify, so save yourself the headache. Plus, when a mortgage lender investigates your accounts to preapprove a home mortgage, they are looking for stability in your finances.
Step 5: Make A Budget and Live on It Now
To best prepare yourself for the expense of a new home, create a budget and start to figure out where your money will go each month after your purchase. Consider things such as increased commuting costs, HOA fees, maintenance fees, and more. Once you make a budget, start to implement it before you buy a home. It will be much easier to start before buying, and you will be used to the changes before you move into your new home.
Let Plantation Homes Help You Purchase a New Home in 2017
As a trusted homebuilder throughout Texas, Plantation Homes has helped buyers to find new homes in Houston and Dallas for more than 25 years. Our sales counselors work with potential buyers to find a floor plan, community, and location that fits their budget and desires.
Learn more about what it means to have a new home Built Around You. Contact us online or call 888-406-7087 to speak to one of our sales counselors today.