What to Do Now to Buy a Home Later

Buying a home requires thorough preparation and planning. It’s crucial to get your finances and other things in order before you start house hunting.

Keep in mind that this early stage of the buying process doesn’t happen overnight. It takes time and effort even before we start working together. This way, when you’re ready to make your move, you can confidently move forward to make that new home yours.

The only way this can happen smoothly is if you do your homework first. So, start prepping and planning now if you want to buy a home in the months ahead or even a year from now.

My list below will help you stay on task. You’ll be ready to buy in no time:

Do Your Homework

It’s very important to become educated about buying a home, especially if you’re a first-time buyer. You need to understand what it takes to buy and own a home before you start seriously looking.

Key Activities to Do Now:

1. Learn About Mortgage Options: Understand how mortgage rates work, such as fixed rates or ARMs, and the difference between FHA loans and conventional loans. Learn what’s available now and the outlook for rates in the coming year so you aren’t overwhelmed or surprised later on. This will help you determine what type of financing is best for you.
2. Explore Neighborhoods and Open Houses: Check out neighborhoods in terms of cost and home features. Websites like HAR.com or weichert.com list open houses and current listings. Walking through homes can help you explore your wants and needs more directly, giving you a better feel for what’s important to you, such as location, kitchen size, backyard, open-concept layout, or room sizes. Since the majority of homes in the Houston area are in subdivisions with deed restrictions and homeowner’s associations, you’ll also get an idea of monthly HOA fees and amenities in different buildings.
3. Find Out About Assistance Programs for Buyers: There are government assistance programs that can make buying a home more affordable, especially for mid-income buyers, first-time buyers, veterans, and more. Local housing authorities can help with down payments or low-interest loans. Don’t disqualify yourself before you try. I can help you explore what’s available in our area, boosting your confidence that you can become a homeowner.
4. Check Out My “Buying a Home 101” Guide: This guide provides an overview of everything related to buying a home, taking you step-by-step from start to finish. Email me to get your copy.
5. Accept You Have a Learning Curve: Everyone has been in your shoes before, so don’t be embarrassed if you don’t know everything. Don’t be afraid to ask questions. Email me to set up a no-pressure consultation to help you explore your options and timelines. You can also speak with a lender now to know if you have any work to do to qualify for a mortgage. Explore the other articles on this blog or check out information on HAR.com or texasrealtors.com.

Get Your Finances in Order

Buying a home is probably the biggest expense you’ll ever have. You want to be a responsible buyer and homeowner, so now is the time to focus on your finances. Don’t do anything that could disrupt your good credit!

Steps to Strengthen Your Finances:

1. Strengthen Your Credit Score and Build Credit History: Your FICO credit score is crucial for getting a good mortgage. The higher your score, the better your loan options. If you’re a couple, both of you need to work on your credit. It can take six months or more to improve your score, so start today. Pay your bills on time, avoid taking on large debt, and double-check your score for inaccuracies. Sign up for sites like creditkarma.com and Experian.com to monitor your credit. The higher the score, the better the loan and interest rate. A lender can even run credit simulations to tell you what you need to do to improve your credit.
2. Know What Monthly Mortgage Payment You Can Afford: Determine what monthly payment you are comfortable with. What a lender says you CAN afford can differ from what you are willing to spend each month. Work backward from your desired monthly payment to calculate the price range you can afford. I can help you budget for a home and determine what you can manage.
3. Save for a Down Payment: Cut expenses and save diligently, possibly in a high-yield savings account. Whether you get a 3.5% down loan or a conventional 20% down loan, lenders want to see sufficient cash reserves. Remember, owning a home includes costs like taxes, insurance, maintenance, and possible HOA fees. A larger savings account shows lenders you’re financially responsible and less of a risk.
4. Revisit Your Lease Agreement: If you’re a renter, review your lease to see when it comes up for renewal and if there are penalties for early termination. Try to time buying a home close to that date, or use it as a deadline to get things in order.

Stay Focused with These 10 Commandments

Avoid risky actions that could derail your ability to get a mortgage loan. Ignoring just ONE of these items can ruin your chances of qualifying for the loan you want.

1. Thou shalt not change jobs, become self-employed, or quit your job.
2. Thou shalt not buy a car, truck, or van (or you may end up living in it)!
3. Thou shalt not use credit cards excessively or let your accounts fall behind.
4. Thou shalt not spend money set aside for closing.
5. Thou shalt not omit debts or liabilities from your loan application.
6. Thou shalt not buy furniture.
7. Thou shalt not originate any inquiries into your credit.
8. Thou shalt not make large deposits without first checking with your loan officer.
9. Thou shalt not change bank accounts.
10. Thou shalt not co-sign a loan for anyone.

By starting your planning now, you’ll be a more informed buyer and borrower, ready to purchase a new home with confidence and less stress.

Know that I can help cut the learning curve for you. We can schedule a time to meet, and I can walk you through the process and steps involved, ensuring you know exactly what to do when you’re ready to move.