Buying a Home in the New Year? 5 Tips to Prepare for It

Buying a house takes planning, financial discipline and a great deal of searching for the right home. If you think that next year will be the year that you finally buy that home, then you need to start preparing for that wonderful landmark in your life. Here are some tips that will help you to prepare to buy a home of your own. 

Buying a Home in the New Year? 5 Tips to Prepare for It


Tips to Prepare to Buy a Home

There are very many steps you would need to take to finally buy that house. The five mentioned here are the most basic yet most important ones: 

1. Get Your Credit in Order

Unless you got a windfall and just came into some serious cash, there is a good chance that you are like most Americans and pretty much everyone else in the world – in need of a loan to buy a house. One of the best ways to ensure that you get pre-approved for a mortgage is to have your credit score in order. Having a good credit score will accomplish a couple of things: 

  • It will allow you to access much bigger loans which means you can actually afford the house you want. 
  • It will allow you to access these loans at a favorable interest rate which will make them better for you in the long-term. 

You can get a free credit report from any one of the major credit bureaus such as Experian. Once you get that report, go through all the line items to find out what could be ruining that score and how you can fix it. It usually takes about six months to repair a ruined credit score. A process that you can begin undertaking today so that somewhere within the next year you will have a favorable score to access cheaper and better loans. 

Buying a Home in the New Year? 5 Tips to Prepare for It

2. Consult the Right Lender

You will need to have a few lenders in mind when it comes to getting a mortgage. You need to start consulting these people to find what kind of offers exist out there. Some mortgage application processes take a while to go through and reaching out to lenders well in advance will give you the time you need to get your affairs in order as per their suggestion. These consultation sessions should give you some insight into how you can qualify for the kind of loan you need at a favorable interest rate. 

3. Think of the Kind of Insurance Your New House Might Need

It is understandable that before you buy a house, all you can think about is “how to buy the house”. You know, things like where you are going to get the down payment and what kind of realtor you are going to use. While these are all very important aspects of buying a home, you also need to take the time to think of one other critical aspect: insurance and home warranty. These are covers that will make your life so much easier and safer as a new homeowner. 

4. Go for Numerous Open Houses

Buying a Home in the New Year? 5 Tips to Prepare for It

Just as you would look at the pictures of an item you intend to buy online before you actually purchase it, you need to attend open houses before you actually buy a home. Attending as many of these open houses in your area will help you see what is out there on the market. It will also help you realize just how expensive houses can be and maybe give you some insight on how to save money on home purchases. One other thing, by attending several open houses, you get to meet realtors and other home buyers who are interested in roughly the same size home and same neighborhood. These networks will come in handy when you are actually ready to make your own purchase. 

5. Save Up for the Down Payment

Even though you may qualify for the best mortgage in the market, you will still need to come up with some form of down payment if you want to buy a house. This could run you up into the tens of thousands of dollars depending on the house you settle on buying. As such, you need to start finding ways to either save up for the down payment or increase your income enough to afford it somehow. Some ideas that you could consider include: 

  • Getting a part-time job to earn extra cash.
  • Selling off some assets that you don’t need or use on a day to day basis.
  • Consolidating your debt so you aren’t spending all your disposable income on paying off interests. 
  • Scaling down your lifestyle so you have more money flowing into your savings. 

The idea is to get as much extra cash as possible. Not only will this help with the down payment but it will also come in handy when you need to pay for your home insurance and home warranty. 

Buying a new home is a huge step. Take the time to prepare for it and try not to rush into anything. Buying a house that you can’t afford is one of the biggest financial pitfalls that many adults fall into without proper planning.

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