Step 1: Examine your credit
Lenders will look at your income-to-debt ratio and FICO score to determine how much you can borrow and at what interest rate. Past delinquencies and late payments will lower your score. Establishing a good track record will improve your score. So first, get a copy of your credit report and clean up any inaccuracies. Pay down as much debt as possible and whatever you do, don’t make any large purchases during the home buying process.
Step 2: Review your finances
It’s time to do a serious audit of your finances. Make sure you have a minimum of three to six months of living expenses in an emergency fund. Determine how much you have leftover for a down payment, how much you spend on monthly living expenses and how much you can comfortably afford for a house payment. Don’t forget, buying a home will include real estate tax, private mortgage insurance and maintenance. This may sound daunting but that brings us to Step 3.
Step 3: Get preapproved
Integrity Group can lead you to experienced lenders who will help you navigate Step 2 as well as help you find out if you qualify for any first-time home buyer benefits. The lender will discuss loan options, down payment requirements, interest rates and potential closing costs. Then you will know exactly how much you can spend on a home and receive a preapproval letter. This tool helps you bargain from a position of strength when it’s time to make an offer.
Step 4: Create a home buying checklist
Envision your ideal home: where it’s located, what it looks like, how many bedrooms and bathrooms, floor plan, size of the lot, old or new, how many square feet, in our out of a homeowner’s association, what features you prefer, etc. Determine what the deal breakers are and what you’re willing to negotiate on. Review this list with one of our agents so we can match you up with your perfect home!