Start a savings account today for your down payment & closing costs.
You may already have a savings account started that you’ve been great about keeping up – 10% every paycheck, right? If not, it’s OK – just start now. When you buy a home it’s good to have as much money for a down payment as you can muster, plus there are a few things to pay for when you’re under contract like inspections, and earnest money, and your option fee.
Keep your savings account for your “emergency fund” funded.
Aside from what you save for your home purchase, don’t forget to keep your emergency fund in good shape. You’ll feel a sense of peace having the cushion to fall back on, and your loan officer might be able to get you a better rate if you can show the ability to keep a little aside while still paying your day-to-day bills.
Talk to a lender you trust.
Speaking of lenders, find one you trust who takes the time to guide & advise you on the financial side of buying a home. A good loan officer or mortgage broker will take a look at your financial situation today and advise you on how to prepare for your first home purchase. From building not-so-great credit, to finding you the best home loan at the best rate, a good loan officer or mortgage broker is an invaluable partner in one of the biggest purchases you’ve likely made in your life so far.
Keep your credit clean, or start cleaning it up.
If you’re starting off with great credit, it’s important to keep it that way leading up to your home purchase. You’re already doing things right – just keep doing what you’re doing! If you’re starting off with less-than-perfect credit, now is the time to start improving it. Pay off those credit cards and slow-pays, keep hard inquiries off your report, don’t open up any new revolving accounts, and keep paying all your other debts on time. Small changes over time make a big difference! Your loan officer or mortgage broker can help you make a plan to improve your credit and get you on track to home ownership.
See if you qualify for a “First Time Homebuyer” program.
This is one of my favorite tips! If you’ve never bought a home before (or haven’t bought one in the last 3 years) you should definitely see if you qualify for some help in the way of down payment assistance or low interest loans. There are some income restrictions and other things considered, but here’s a link to a quiz that will help you figure out which Texas programs are available for you.
Research the areas where you want to live.
If you’re thinking about moving to a different area of town you’re not familiar with yet, now is a good time to get to know the neighborhood. Take a drive there after work during rush hour to get a feel for what your commute will be. Ask your realtor to help you find out what home prices in the area have been like in the last 5 years, like whether the property values have gone up or down, and at what rate?
Spend time in the areas where you want to live.
In addition to getting data about the area, go shopping in the area, eat at restaurants, take a field trip with your dog to a neighborhood park and meet some of your new neighbors! You might even meet some new friends – it’s a win-win!
Keep an eye on mortgage rates & other market conditions.
You and your loan or mortgage officer should be in regular communication, at least once a month. Ask them to keep you informed of mortgage rates, or subscribe to a mortgage news site to keep you informed of the mortgage market and how what’s happening in the world and your city affects you and your future home purchase.
Start getting rid of clutter & other items that won’t be coming with you to your new home.
This is probably something we could all benefit from whether we’re buying a home or selling one! The thought behind this is that you’ll be able to see more clearly when you’re ready to start looking for a new home how much space you really need or don’t need. Got a weight bench sitting in the corner that’s acting more like an extra closet? Sell it and put that money into your home purchase fund, or use it to pay down some of that debt! Build enough momentum and you can start seeing your house fund growing like magic, and you’ll be ready to buy a home before you know it.
…and have faith that by following these tips you’ll be able to buy what you want when you’re ready. And when you are ready, give us a call.