1. Affordability: What monthly payment are you comfortable with.
The lender may qualify you for $200k. Based on your lifestyle, is that an amount you are comfortable
with and that will still allow you to save?
2. Money: Do you have any savings? If not, start now. A down
payment is is typically 3-5% of the sale. Additionally, you need that amount for closing costs in
this market. Other options for funds: 1) Perhaps you have family member that is willing to give you
a gift 2) Down payment assistance programs 3) Retirement plan
3. Credit: Are you credit ready. When is the last time you
reviewed your credit report. It’s time if you of thinking of making this purchase. Visit www.annual
credit report for a free copy. Review it thoroughly. Make sure you don’t have any late payments in
the past 12 months. This will prohibit your from purchasing.
4. Look at your score: You need a credit rating of 640 or higher
for most loans. The higher your score, the better your interest rate will be. If you are not there,
visit the bank where you have your account and ask to speak to someone in the mortgage department.
They will gladly look at your credit report and let you know what changes need to happen for you to
be ready. Judgements will take longer to remove. We recommend you talk to a credit specialist. They
may be able to help you reduce them. Some credit unions don’t provide an Equifax Score. Most lenders
are going to have the three agencies that report to the Credit Bureau.
5. Length of Stay: Will this be your forever house. If this is not
the plan, you want to make sure you are purchasing in an area that is appreciating in value. If it
is not, you could lose money if you sell in the next 3-7 years.
6. School District: Do you need to be in a specific school zone. I
loved the first home I purchased. The schools were great until it was time for high school. I had no
plans of moving but wanted my daughter to have a great school and more options for scholarships. The
schools in my district didn’t offer that so I had to move.
7. Location: How far are you willing to drive to work? Is there
substantial traffic that you would like to avoid?
8. Guidance: Find a realtor to help walk you through the process. A
realtor can help direct you in the right path for all of the above. They are trained in every area
and have made connections with vendors who can help you in every aspect of the process. A good
realtor will make this process fun, easy and memorable. They will work on your behalf to make sure
you get the best bang for your buck.
