Even if you are not currently ready or planning to buy a home in the U.S., simply thinking about homeownership means it’s time to start preparing. Your home-buying journey can begin months—or even years—before you actually purchase a property.
Here are 10 important steps to take well in advance:
Start saving for your down payment and closing costs.
Every additional dollar you save can ultimately work in your favor.
Improve and maintain your credit score.
Try to keep your credit score above 740 to give yourself more flexibility when choosing mortgage options. Even a few additional points can potentially save you money.
Get a mortgage pre-approval and loan estimate when possible.
A mortgage professional may be able to provide this at no cost. Knowing where you stand financially can help you understand how much you may qualify to borrow and what you can do to increase your purchasing power.
Research neighborhoods, ZIP codes, schools, and the types of homes you like.
Start learning about the areas that interest you and the types of properties that fit your lifestyle, needs, and budget.
Reduce your existing debts whenever possible.
Paying down debts, such as a car loan, can help improve your debt-to-income ratio (DTI). Avoid taking on new debt or applying for new loans between now and the time you purchase your home.
If you are a first-time homebuyer, research local homebuyer assistance programs.
Some counties and local governments offer valuable financial assistance to eligible buyers under specific requirements.
File your tax returns consistently and on time.
Keep your tax filings up to date, especially in the years leading up to your home purchase.
Maintain or advance your employment before buying a home.
Avoid unnecessary gaps in your employment or income documentation, such as pay stubs. Stable and consistent income can be important when applying for a mortgage.
Make all of your payments on time.
Late payments can negatively affect your credit profile. Lenders may carefully review your recent payment history when evaluating your mortgage application, so maintaining a strong payment history is essential.
Connect with a real estate professional early.
A knowledgeable Realtor® can help you understand the home-buying process, answer your questions, and provide additional information so you can be better prepared when the time comes.
Your home-buying journey doesn’t start when you make an offer. It starts when you start preparing.
Mohamamd Jaz
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