Waiting To Purchase A Home? 3 Things To Start Doing Now!
Updated: Apr 20
June 8, 2022
Right now the housing market is horrible, rates are higher than they've ever been, and homeowners are raising prices to match inflation.
"All is fair in commerce and war!"
Banks are also very careful how they give loans.
This means the consumer with the bigger down payment and the better credit score gets the home.
A tale as old as time! But does this mean that all hope is gone for someone like you?
No, of course not, because you don't mind waiting, and while you wait there are 3 things you can do to improve your chances:
Start a little nest egg for a down payment and closing costs.
Monitor your credit to ensure you have a fighting chance.
Learn what you can about the home buying process.
Down Payment and Closing Cost
You decided not to make a move right now in the housing market, but it doesn't mean you can't continue planning and learning as you prepare to strike when your time comes.
First, you can build your down payment and closing cost nest.
Whether you decide to go with a conventional loan which can require 20% down or a program for bad credit/low-income buyers like FHA which requires 3.5% down, you still need money.
Start saving now, it's never too late!
You'll have to create a budget and downsize on luxuries you're accustomed to, so ask yourself, "Do I really need another pair of black shoes".
Now you may be thinking, "I already live check-to-check, so how am I gonna save for a home."
Well, you have to decide what you are ready to do, start with this awesome "So You Think You're Ready to Buy Your First House?" quiz by Jacquelyn McGilvray.
Don't let anyone convince you to purchase a home if you're not ready to sacrifice some luxuries.
But if you are ready, start saving your money, calling in loans, and building your credit.
Monitor Your Credit
So while you're,
deciding the type of loan you want, and
saving your money for a down payment and closing costs,
you'll need to monitor your credit to make sure all your efforts aren't in vain.
Sure, you have Credit Karma and there is nothing wrong with that. But for a large purchase like a home you need to dive deeper into your credit. Credit monitoring can be a complicated thing.
Especially when you realize you can have up to 16 different credit scores, and yes you read correctly, up to 16.
My advice is to join My Fico for a few months so you can see all your credit scores. You'll then be able to focus on the score mortgage lenders use to determine loan approval.
Pay off your off debt! If a credit repair company is telling you not to repay old debt this is a red flag because you won't be able to purchase a home with it hanging on your credit report. Try researching credit repair companies that are trustworthy.
Remember, you want the bank to loan you hundreds or thousands of dollars. They won't do that without knowing you can be trusted.
Seeing this old debt you're waiting to fall off is telling them you don't handle money well.
Learn about the Home Buying Process
Lastly, try to learn as much as you can about the home buying process.
Yes, you will have a realtor, but you want to be informed and educated about what's happening and if you are getting the best from all parties.
You'll need to understand the role of these 3 key players in your home ownership process, the loan officer, the