Whether you are considering purchasing a home in 2017 or you have already made the decision to take the leap, now is a great time to make sure you are on track to reach your goal.
No matter what stage you are at, here are the top things you should be doing in 2017 to accomplish your goal.
Step 1: Automate Your Down Payment Savings
When it comes to saving for a big purchase, there is one tried and true rule that financial advisors say anyone needs to implement to make their goal a reality: pay yourself first.
What does it mean to pay yourself first? It means automating your banking situation so that a set amount of money goes into a savings account before it even hits your main account. The idea behind automatically deducting the money into a separate account is that if you never see it in the first place, then you won’t miss it or spend it.
Step 2: Ensure Your Credit is in Order – And Not Just Your Score
Having enough money for a down payment is crucial, but it is just one step to ensure your financial health. Aside from having enough money for a down payment, checking your credit report is one of the most important steps you can take toward buying a home.
A good credit report is important because it can influence your mortgage rate, with a better credit score typically leading to a better mortgage rate. While a difference or 1 percent may not seem like much at face value, when you add up the cost of the additional 1 percent throughout a 30-year mortgage, the extra expense can be significant.
In addition to checking your score, examine the report carefully to be sure it is free of any errors. These things do happen, and sometimes having the mistakes fixed and rectified can take a significant amount of time – time you may not have if you find your dream home and want to make an offer.
Step 3: Get Pre-Approved for a Mortgage Loan
Getting a preapproved mortgage loan serves two important purposes: it certifies you have the proper financial resources to undertake the purchase or a home and it helps to set a realistic limit on your budget.
To get preapproved, a financial lender looks at items such as tax returns, W-2 forms, debts and other financial assets to determine the amount of mortgage you can afford. Preapproval also allows you to get in contact with different mortgage brokers to complete the process. During this process, you can shop around for various interest rate and fee structures to ensure you get a mortgage loan that is compatible with your terms and finances.
Step 4: Keep Your Money Where It Is
It sounds simple enough, but it is important to not make the critical mistake of making large purchases or moving money between accounts before buying a home.
When a mortgage lender investigates your accounts to preapprove you for a home mortgage, they are reviewing your financial assets to assess your financial stability. Adjusting your assets while applying for a home loan can make your bank accounts appear in flux rather than stable, as well as inadvertently harm your credit score.
Step 5: Live on Your Budget Now
Buying a home oftentimes affects your monthly finances, so it is best to determine the expected changes before you purchase.
Best prepare for this shift by mapping out a monthly budget of how you expect your monthly income to be allocated once you purchase your home. Account for things such as higher commuting costs, increased utility bills, HOA fees, mortgage payments, and more.
After you map out your budget, implement it BEFORE you buy a home, especially if you anticipate having less discretionary income after your home purchase. It will be easier to adjust to the changes now rather than after you purchase a home and have other stressors.
Let Coventry Homes Help You Purchase a New Home in 2017
As a trusted homebuilder for more than 25 years, Coventry Homes has built quality and affordable new homes for buyers in the greater Houston, Dallas, Austin and San Antonio metropolitan areas.
Our sales counselors work with potential buyers to find a floor plan, community, and location that fits their budget and desires. Learn more about what it means to have a new home Built Around You. Contact us online or call 888-406-7087 to speak to one of our sales counselors today.