3 things to do before buying a home

 3 Things to Do
Before Buying a Home

1. Check your credit and take action, if necessary

 

A mortgage lender will pull a credit report to get your loan application rolling. To avoid surprises, do your homework!

• Know your score. Everyone gets one free credit report annually-- no need to pay a third-party site that charges you for a copy. Find the real deal, here:  https://www.annualcreditreport.com/cra/index.jsp Remember, there are 3 credit bureau's that will each calculate a different score-- mortgage lenders will use your median (or middle) score.
• Check your report for errors and address them with your creditors.
• Take note of the reasons for your score listed by all 3 bureau's. Is there anything you can address today? Example: Perhaps a reason listed is "Proportions of balances to credit limits is too high." Do you have the means to pay down a card or two? The bureaus like to see balances below 50% or even better, below 30% of the credit limit.

2. Don't open any new lines of credit

It's a good idea to go into the mortgage application process with your best foot forward. Lenders don't like to see new accounts or credit inquiries 120 days or so before applying for a home loan.

The same principle applies for when you are in the process of getting a mortgage loan. I know it's tempting to open a Home Depot credit card and buy that shiny new energy-efficient washer and dryer set for your new home-- but resist! Believe me, I know that buying a home is exciting, and shopping for the things you will put inside is so fun-- but it's not worth it to put your closing date or even your qualification in jeopardy. Celebrate your loan closing with that first trip to Home Depot.

3. Get Pre-approved

Now that you've done your homework, get pre-approved before you go house-hunting! Realtors agree that a pre-approval letter has a lot more gusto than a pre-qualification letter, and can go that extra mile in the negotiation process.