5 Things to Do 6 Months Before Buying Your New Home

Buying a home is often stressful. There are so many things to do and get ready before you even apply for a loan. There are a few things to start six months in advance. These steps help relieve some stress and get you ready for that new home.

1. Check Your Credit

One of the first things you should do is check your credit. You can pull your free credit report once a year from the credit bureaus. Make sure to pull all three reports. Some credit cards, auto loans, and other credit companies will only report to one or two of the bureaus. Pulling all three reports gives you everything you need. You should also pull your credit scores. You will have plenty of time to fix errors before you start the homebuying process. 

2. Save Money for Down Payment and Other Expenses

This step is crucial to getting that home that you are looking for. The more money you put down the better. Many people begin saving years before purchasing their homes. If this wasn’t an option before, then start looking at ways to save. Some loans do not need any down payment, but you should prepare for it. Take a folder and begin to put all your financial information in it. This data should include things like bank statements and tax returns for the last few years. These are things required at closing. If anything pops up, then you will have plenty of time to fix it. 

3. Pay Off Any Outstanding Debt

This is where those credit reports will come in handy. Your credit reports give you an accurate and updated account of everything on file in your name. Look for discrepancies in your reports and pay down your debt. Credit agencies like to see consumers using only 30% or less of their credit limits. Also, look to make sure there are no collections or judgments on your report. Make sure to fix these if there are. Try not to make any big purchases until after your closing date. 

4. Research Prospective Homes and Loans

Research is a crucial step when buying a home. You need to research different types of loans and their interest rates. Also, investigate FHA and USDA loans to see if these are a good fit as well. Call local agencies for updated information as well. 

5. Get Paperwork in Order and File for Preapproval

Before looking for a home, make sure to have all your paperwork in order. The financial folder you started will help with this. Next, you need to file with the bank for a preapproval letter. If you already received a prequalification letter, that is great. However, a preapproval letter gives you a pre approval amount. This will help you to know the ballpark figure of what you are working with. 

Buying a home is exciting and intimidating at the same time. Start the process early and take your time. Be organized and smart about the steps you take in the process. These five steps will help you as you begin looking for your new home.


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