Crisp air, golden leaves, shorter days—all of nature’s signs show that fall is in full swing. For many, these signs of the approaching cold weather come with a desire to curl up and get cozy in the comfort of your own home. While this might be a natural impulse, the decision to purchase a home should be carefully calculated. Such a monumental choice deserves planning and preparation. This fall, in your search for a home to call yours, be sure to consider these helpful fall home purchase tips.
Your credit score is a great place to start. Before you can get too deep into the search for a home, find out your credit score and keep it handy. This will determine what home financing options are open to you. If you need help understanding your credit score and how you can improve it, give us a call and we’ll be happy to share our expertise.
Here’s what you need to know about credit scores: The higher your credit score, the better. A credit score between 620–639 is generally acceptable to most mortgage lenders and may make you qualified for a USDA or FHA loan. A score between 640–720 is good and will expand your loan options. If your credit score is above 720, it’s considered excellent and should qualify you for just about any mortgage—not to mention lower rates. Typically, as your credit score increases, the number of loan options increases and the interest rates decrease.
This recommendation might not come as a surprise to most people. It’s widely understood that, in order to purchase a home, you need to have money. Even if you qualify for a 0% down payment mortgage, you will still face various costs that are just part of the process. Additionally, lenders will review your financial situation to determine that you are stable, consistent, and responsible. At a basic level, lenders simply want to make sure that you can and will pay your mortgage. For these reasons, financial stability is crucial to home buying.
To help demonstrate financial stability, have a good amount of money in your savings account (at least enough to cover the cost of a down payment), pay your bills on time, and be honest about your finances. It’s in your best interest not to open any lines of credit, move large amounts of money, or close any bank accounts during the loan process. Movement like this may hinder your chances of making it to the closing table.
Job stability goes hand-in-hand with financial stability. Job stability generally means your earnings have remained at a certain level for at least two years. If you are self-employed, you will be required to provide at least two years of bank statements and tax returns. Again, the goal is for your lender to see that you are stable, responsible, and have the income to make mortgage payments. The more stability you can prove, the greater your chances of getting approved for a loan.
Renters: This is important. Your mobile lifestyle was great while it lasted, but maybe it’s time to settle down. Well buckle in because purchasing a home is a long-term commitment. Before you put money down on a house, make sure it covers all of the must-haves on your list—the right neighborhood, the right location, the right school district, etc. Ask yourself “Can I see myself living here for the next seven years?” If the answer is yes, you’re one step closer to being ready to put down roots in that location. Want more information on how to navigate the transition from renting to buying? Read our guide to buying versus renting.
Who doesn’t love a good, old-fashioned pros-and-cons list once in a while? This fall, decide exactly what you are looking to get out of a home. Write down what you want to have and what you need to have. A family of five might be interested in a four-bedroom craftsman with a large backyard while a 30-year-old bachelor might be better suited for a two-bedroom condo. In addition to bedroom/bathroom combinations, you should consider other aspects of the home, such as acreage, the year it was built, distance from the nearest grocery store, and more. In this endeavor, be honest with yourself and be mindful of the possibility of your expectations clashing with reality.
As with most of life’s milestones, buying a home is a learning process. It’s common for borrowers to lack understanding of the path to homeownership. Some don’t realize the costly fees associated with a mortgage, others misunderstand the roles of the real estate agent and mortgage lender in the process. It’s not easy to know what to expect on your own, so frequent conversations with both your agent and your lender are in your best interest.
During the mortgage process, make sure you are available by phone or email so that your lender can get ahold of you when they inevitably need to communicate with you. Your cooperation will help the process move along nicely. And always remember that mortgage experts like ourselves are well-prepared and equipped to share our expertise and set accurate expectations so you can enjoy a smooth road to homeownership. This leads us to our next fall home purchase tip.
Patience is the key to sanity in the process of purchasing a home. Like setting accurate expectations, keep in mind that organizing your finances takes time, negotiating takes time, finding the right home takes time, and more. You can expect an average of 90 days for the total experience—from the moment you start seriously house hunting to the day your loan is closed and funded.
There are certain things you can control: Knowing what you want out of a house and organizing your finances are aspects that you can have done and ready before you begin. The rest of the home buying process should move quickly once you have your responsibilities in check. Plus, our mortgage experts are fast and efficient, always working to get you to the closing table on time.
This fall, prepare yourself for homeownership the smart way with these helpful tips. Not quite ready? No problem. These fall home purchase tips can be applied to any season. Remember this: Home buying is a process that doesn’t come naturally to most people, but whenever you’re ready, we’re here to help.