The housing market is changing. The past few years have been considered a seller’s market. While inventory is anticipated to be still lower than ideal for homebuyers, 2019 is predicted to become a buyer’s market.
If your goal is to purchase your first home, upgrade to a larger home to raise your family, or downsize for retirement, it is important to start now so that you will be prepared to make an offer when you find the right home for you. Use these tips to get organized for your home search:
1. Obtain Your Credit Score & Review Your Credit Reports
Before you start looking at homes, you should know your credit score. The first thing a lender will do is pull your credit report to learn more about your financial situation. Therefore, you should obtain your credit report from each of the three credit reporting agencies to obtain your FICO® credit score.
You’re entitled to receive one free copy of your credit report every 12 months from each of the credit reporting agencies, Equifax, Experian and TransUnion. Credit reports can be ordered from annualcreditreport.com or call 1-877-322-8228. To verify your identity, you’ll need to provide your name, address, social security number, and birth date. If you find errors, you should notify each bureau reporting the error.
Credit scores range from 300 to 850 with a higher credit score indicating a lower credit risk. While a credit score of 700 and higher is generally considered good, you can qualify for a home loan with a lower credit score.
2. Find A Mortgage Company
Now that you’ve reviewed your credit reports and know your credit score, it’s time to look for a mortgage lender. While many people first turn to their bank for a home loan, it’s also important to speak with a local mortgage lender with a reputation for closing loans on time
. These lenders often have access to a wider variety of home loan options know the qualification guidelines for the first-time home buyer and down payment assistance programs offered by your city, county and state.
3. Get Pre-Qualified For A Home Loan
Once you’ve found a mortgage lender, get pre-qualified for a home loan before you seriously begin your house search. You’ll know how much of a home you can afford to purchase so you can focus your house search. A professional loan officer can also help to identify any red flags you may have in your credit history that could negatively affect your home loan application. Having plenty of time to address any credit issues in advance, rather than when you’ve found the home you want to purchase, will put you in a better position for your home loan application.
4. Don’t Open New Credit Cards
Don’t be tempted to open a new store or credit card to purchase furniture for a home you haven’t even found. Opening any new credit accounts may hurt your chances of getting a good home loan rate.
5. Pay Your Bills On Time
Your ability to pay your existing monthly payment obligations on time, whether it’s rent, utilities, student loan or credit card payment, provides the mortgage lender with an indication of how financially responsible you are and whether you will be able to repay additional debt.
6. Interview Real Estate Agents
In 2018, 87% of home buyers* purchased their home through a real estate agent or broker. Of these homebuyers, 41% of buyers* used an agent that a friend, neighbor or relative referred to them. If you can get a referral – that’s great! However, you owe it to yourself to interview a few real estate agents who know the neighborhoods where you intend to search before deciding on the agent you want to work with. Your local mortgage lender should be able to provide a referral to agents they know in the region.
7. Reconsider Renewing Your Lease
If you are currently renting, review your lease for an "early termination" clause and compare any costs of changing to a month-to-month or six-month lease.
When you are ready to get pre-qualified for a home loan, contact a Certainty Home Loans mortgage professional in the state where you intend to purchase
* 2018 Profile of Home Buyers and Sellers, National Association of Realtors
Jan 14, 2019