You’ve finally decided to do it. After years of saving and planning, buying your first home rises on the horizon. You can’t wait to get the furnishings you’ve stored at CitiWide Self Storage into your new dream home. Before you get too deep into the home search process and sign on the dotted line, consider these tips for buying your first home.
Get Your Credit in Order
While many lenders have their own set of criteria for what qualifies as bad, good, and excellent credit, you can take certain steps in advance of applying for a loan to better your credit score. Generally, good credit scores fall between 661 and 780 and excellent credit between 781 and 850. A bad credit score can negatively affect your chances of getting a mortgage loan or could result in a high interest rate. Take the following steps to better your credit and get prepared for buying your first home:
- Payments should be made in full and on time
- Credit cards shouldn’t be maxed out
- Check your credit report for mistakes, unpaid accounts, and collections accounts
If you think your credit may need some work, start working on the repair process at least six months before starting the home buying process. The amount of credit used relative to your available credit limit can sink a credit score, even if you pay everything on time each month. The lower your utilization rate, the higher your score. First time homebuyers ideally have a lot of credit available, with less than a third used.
Get Organized and Pre-Approved
When it comes to buying your first home, getting pre-approved for a mortgage has become increasingly more common. Interested parties have started to get pre-approved for mortgage loans before they find a home they want to buy. In order to get pre-approved, you must get organized about your financial history, assets and liabilities, and personal information. It’s important to shop around for lenders, as many of them will offer different interest rates. The pre-approval process usually takes between a week and a month. With this time frame, being pre-approved allows you to prepare to write an offer more easily. Imagine finding your dream house and then missing the chance to own it because you have to wait for approval on a mortgage loan.
Get organized in order to apply for mortgage loans and potential pre-approval. Lenders typically request two recent pay stubs, the previous two years’ W-2s, tax returns, and the past two years of bank statements – every page, even the blank ones. While lining up your financial ducks, it is a good idea to take advantage of convenient self storage at CitiWide to organize your belongings and get a fresh start on your upcoming move.
Find the Right Realtor for You
Finding the right realtor helps ease new homebuyers into the process. You want to find a realtor you feel comfortable with, that you can trust with assisting you in this major life decision. In addition to making you feel comfortable, they should also know the area and the price point you want. Ask friends for referrals and read online reviews in order to get a feel for what to expect with a potential realtor. For first time homebuyers, a realtor can help keep you informed and make for a better experience. Helpful realtors can break down the terms and process for you and then allow you to browse listings by yourself. In addition to keeping you informed, realtors tend to have a network of lenders their clients can work with to get pre-approved. Looking for a realtor recommendation? Reach out for recommendations on social media. Odds are your network knows the perfect agent to help you buy your first home.
If you’re considering buying your first home this year, take these tips into consideration in order to properly prepare yourself for the process. Buying your first home is exciting, which is why it’s important to set yourself up for success.
For more great tips on organizing your life, stay up-to-date with the CitiWide Self Storage blog.