It’s the new year, and everything is filled with possibility. If you are a hopeful homebuyer planning on starting your search for the perfect house this year, it’s important to take a few preliminary steps to prepare for such a large purchase.
Here are a few things you can do right away to get ready for your home hunt.
Get your credit in order
Before you do anything else, you’ll want to consider your credit. The strength of your credit score can drastically affect the loan approval process, and improving your score can take several months of good behavior before you see results. Make sure you pay all credit statements on time and that you keep the balance on your cards fairly low. For more detailed information on improving your credit score, check out our blog dedicated to the subject.
Track down important documents
The homebuying process will require you to provide a number of sensitive documents about your identity, your work salary, your marital status, and your tax history. While it might seem like a no-brainer to have these items all saved in a safe place, not everyone has easy access to things like their birth certificate, social security card, old W-2s, and pay stubs. If you don’t know exactly where you keep these necessary documents, make sure you go through the process of gathering or acquiring them. You may need to contact your current employer, past employers, the IRS, the Social Security Office, or the Vital Records Office to retrieve these papers. Once you’ve got all of your documents together, make sure you store them in a safe and secure space until you need them for your home purchase.
Research government grants
The Federal Housing Administration (FHA) and the U.S. Department of Housing and Development (HUD) offer both grants and loan assistance for homebuyers in a variety of situations – especially first-time homebuyers. Many of these grants allow you to put a significantly lower downpayment on a home than would otherwise be feasible. Visit the HUD website for additional information about grants and special loan rates available in your state.
Create a realistic wish list
While it’s fun to imagine your dream home when you aren’t contemplating a purchase, once you actually start to get serious about home shopping you’ll need to temper your expectations. After all, not all homes come complete with wine cellars and walk-in shoe closets. Write down a list of the non-negotiable things you will look for in a home. This list can include number of rooms, number of bathrooms, square footage, amount of storage space, and it can also include things like location and commute time. Next, you can create a “Nice to have” list, which features things that aren’t 100% necessary but that you’d still really enjoy having in your home. Make sure to bring these lists with you while you tour potential homes to help guide you.