Buying a home is still considered a goal worth achieving. However, as conditions change, that objective becomes less achievable for many families. However, there are solid strategies anyone can use to increase their odds of qualifying to purchase a home today. Here are a few concrete ways to put your dream home within reach
Review Your Credit Reports
Buying a home with cash would be nice, but virtually no one has the funds to purchase a home. That means obtaining a mortgage is a must. According to lenders, anyone planning to purchase a home should start by checking their credit reports before looking for a home is always a good idea. Doing so helps would-be buyers to determine if their current scores are acceptable or if making an effort to boost them before applying for a mortgage would be advisable.
While the minimum credit score to obtain a mortgage is 620, borrowers with scores over 700 will stand a better chance of being approved. In addition, a higher credit score generally means a borrower qualifies for a lower interest rate. Even a minor difference in interest rates adds up significantly over a 30-year term. In other words, if your credit score is lower, take whatever steps are currently available to move the number upward.
Discuss Your Mortgage Needs with a Lender
Next, visit a lender to determine which type of mortgage would best meet your needs. Your current financial status, the amount required to purchase a home, and other factors determine which type of mortgage best meets a borrower’s needs.
At the same time, ask the lender about preapprovals and how a preapproval would improve the odds of buying your dream home. Many areas of the country continue to see highly competitive bidding situations where sellers can choose from a number of offers. If your offer doesn’t include a preapproval letter, the odds of winning a bidding war are not high.
Even in communities with ample supplies of homes for sale, being preapproved provides a decided advantage, as many sellers refuse to seriously consider offers where the buyer cannot confirm their ability to close the sale. Realtors may also insist on preapproval letters before agreeing to represent a buyer.
Have All Paperwork in Order
Obtaining a mortgage today is complicated. Lenders require a great deal of documentation before approving a loan application. In addition, different types of loans require different documents. That’s especially true for first-time homebuyers or anyone who’s experienced bankruptcy or other credit issues in the past. Ask your lender what documentation you’ll need, and start putting all that paperwork together as soon as possible.
Many times, lenders will require documents you may not have on hand. That means delays occur while tracking those forms down and having them sent to the lender. Being proactive and lining up all paperwork before it’s needed reduces the chances of delaying the closing or losing the chance to purchase the home.
Line Up Your Team Early in the Buying Process
One key element of putting your dream home within reach is lining up a team of experts early in the buying process. That means finding a lender, a real estate agent, and an attorney to provide the help you’ll need during the home-buying process. If you’re exploring your home-buying options, now is the time to contact a lender for help.