2020 is here and now is the time to get serious about buying a house. The Central Texas real estate market is very competitive and with the housing shortage, you need to get your ducks in a row to become a real buyer. Here is a list of four things to do before you start your home buying search.
1.) Check Your Credit-
Know your credit score is the first place to start. Most lenders will not approve you for a home loan until you hit at least a credit score of 620 and above. This is important because this shows lenders how you are with your finances and where you will score on the interest rate scale. If your credit is lower than 620 you will want to work on it and get it up to 620 and beyond. Having a credit score of 700 or better will greatly help you land a better interest rate and will translate to lower house payments and more lender options.
2.) Work On Your Debt-
If you have a lot of debt like car payments, credit cards, and student loans. You will want to work on reducing and eliminating this before you acquire a home loan. Lenders look at your credit score but also your debt ratio. So getting a hold of your overspending and debt is also another factor in getting a home loan. Start cutting back on overspending and stop using your credit cards. Pay down as much debt as you can and start living below your means. Lenders do not want to see you using a lot of your credit cards and making major purchases before you buy a home. Start thinking early in 2020, to spend less and save more.
3.) Save For Your Down Payment-
Most down payments are between 3% to 10%. You no longer need the full 20% down payment to buy a house, however, 20% down will help you not have to pay for the PMI insurance. So start saving for your down payment but also for closing costs. This can be an added expense that people forget to figure into their down payment. Make sure you have enough for closings and inspections. Buying a home comes with a lot of extra fees so be prepared!
4.) Find a Seasoned Realtor-
Be sure to find a realtor that knows the area and has a solid reputation. There are a lot of things that go into buying a house and having a seasoned professional by your side is key to your success! Buying a home can take months and you want to work with someone who knows the business and is going to work hard for you. Finding your first home can be very stressful but also an exciting time in your life. Choose your realtor wisely!
Good luck with your new home search in 2020! My team and I are here to help you every step of the way! Be sure to contact us with all of your real estate needs.