So you’ve decided to buy a home—congratulations! What happens now, though?
Your first order of business should be to speak with a lender. It’s very important in today’s market to get pre-qualified so you know what you can afford. At Hillside Properties, we make sure all our buyers are pre-qualified before we start showing them homes and writing offers. There are three factors lenders weigh when pre-qualifying buyers: credit score, income, and how much you’ve saved for a down payment.
“It’s very important in today’s market to get pre-qualified so you know what you can afford.”
You may already know your credit score (if not, you can find out by visiting freecreditreport.com), but in addition to the score, your lender will examine your history—or how many accounts you have open. It’s imperative to work with a lender or Realtor to get your score up. You should shoot for the 700s if you want access to the best rates and programs.
When it comes to your income, they’ll want to see your bank statements, paycheck stubs, and the past two years’ worth of tax returns. If you have a fantastic job that you got 18 months ago, it might be best to wait another six months before meeting with a lender. You’ll need two years’ worth of tax returns if you want to show a steady, growing income.
As far as the down payment goes, you’ll ideally want to save up enough to put at least 20% down. Again, this will give you access to the best rates and programs. Many aren’t able to save up this amount, though, so they have to settle for putting down less. The good news is, there are programs out there that allow you to put down as little a 3% or no money at all.
If you’d like help navigating this all-important step in the home buying process, give me a call or send me an email. If you have any other real estate questions, feel free to reach out to me as well, or schedule a call using my calendar here. I look forward to hearing from you.
