Buying a new house is a life event—and the more informed and organized you are about it, the better off you’ll be when it comes time to making an offer on your dream home. Whether you’re a first-time buyer or upgrading to a newer home, prepare now with this multi-step checklist.
Understand your financial status in terms of your credit and credit scores.
Equifax, Experian and TransUnion are all major credit bureaus that can provide your credit report. Take some time to review the accounts listed and make sure there isn’t any inaccurate information. You’ll also want to know your FICO credit score—the 3-digit number that major lenders use to gauge your risks. You’ll want your score to be higher than the 700 benchmark most creditors require. In the meantime, try not to open any accounts, be sure to pay all your bills on time and don’t max out your credit cards. You don’t want to do anything that may adversely impact your credit score during this new home buying timeframe.
Step up your savings.
Your home financing options are directly tied to the amount of cash you’ll be able to put down on a house. You’ll need at least a 5% down payment, so bulking up your savings is a critical step to buying a home. Review your monthly expenses and cut back wherever possible—eat in more, stop going to the movies, and limit all the “want-driven” purchases. You’ll also need to deal with any debt, especially credit card balances. Mortgage lenders see this as a red flag of poor personal financial management.
Take some time to research your mortgage options.
Most experts agree that the safest home mortgages are traditional, fixed-rate mortgages. You don’t want to get into a situation where a variable rate eventually kicks in and drives your monthly payment beyond what you can pay.
Be realistic with what you can really afford.
Create a spreadsheet of all potential expenses associated with owning a new home. You may already expect the property tax and insurance rates when you purchase a new home—but many people don’t think about the increased heating bills, home décor budget and maintenance costs. Be sure to calculate all of these types of expenses and decide what’s truly affordable to you.
Get pre-approved on a mortgage.
About two months out, it’s a good idea to get a commitment from a mortgage lender. Having that source of credit available to you will make you a much stronger buyer in the eyes of the seller.
Refine your search and find your dream home.
Working with a reputable real estate agent, you’ll want to explore neighborhoods, research the overall area (schools, medical facilities, cultural opportunities) and tour available homes—until you find the right home and your offer is accepted.
The final leg of buying a new home involves the four to six week long process of securing the mortgage loan, having the hope appraised and inspected and conducting a final walk-through of the property. All this leads to your “closing”, or official purchase of the home. You’ll need to pay your down payment and all agreed-upon amounts and sign the mortgage and title paperwork.
When you purchase one of our finely-handcrafted new homes, you become part of the JordanBuilt family. Our signature on the sales contract is your guarantee that we at Jordanbuilt Homes value customer satisfaction. We are here to help you every step of the way. Contact us today and learn more about the JordanBuilt difference!