Mortgage Preparation Tips and Key Home Buying Steps

With real estate slowly recovering and home prices at record lows, you may be thinking of trying to get a better deal. Here are some good tips to consider when buying a house:

Keep your credit clean

Making sure you have no outstanding credit issues is important in mortgage preparation. Your credit rating affects what terms will be offered to you. Get a credit report a few months before you start looking, so you’ll have time to fix your accounts.

Shop around for the best lenders in the area

Some lenders have guidelines that will allow you to put down as low as three percent of the purchase price – and still give you a low-interest mortgage. It takes some legwork, but it’s worth it.

Make sure you are pre-approved

Before looking at houses, make sure your lender has given you pre-approval. Unlike prequalification, pre-approval means that your income, debt and credit history have been cleared.

Get a truly affordable home

This is probably the best advice in buying a house: go for what’s affordable, all costs included. This usually means getting a house that is 250% of your annual salary. That way, you can factor in all expenses that come with having a house – from added mortgage costs, taxes, maintenance to utility costs.

Ring up a home inspector

One of the important home buying steps is to get a home inspector to look at the house. This should be separate from the appraisal that the bank will do. This way, the inspector can tell you about anything that you may have to worry about in the future, in terms of maintenance.

Be prepared to stay
You should be willing to stay in that house for a good number of years, the shorter your time in that house, the more expensive it will be for you when you do move.

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