Getting ready to buy a home need not be difficult. In many cases, it is as simple as taking a first step and asking a question.
Where to start
Generally, buyers start with whichever step feels the most comfortable. Some buyers will go on-line to see what’s for sale nearby. Others are driving by a sign when they decide to start by looking at that particular home. Some will want to find out how much they can afford, while others convince themselves they can’t afford to buy. They will all eventually find that there is a process and they may have to re-visit a step or two that were skipped when they decided to buy a home.
Checking Your History
You can check your credit history simply by visiting AnnualCreditReport.com and requesting a copy of your credit history report from each of the major credit bureaus (Equifax, Transunion and Experian). The reports are free with no obligation to buy anything or to subscribe to any additional service. You are entitled to 1 (one) such report from each bureau once a year. This is the only website that does not automatically sign you up for a subsequent paid-service.
Once you have the reports, read through them and make sure everything is in good standing. There should not be any late payments, missed payments, evictions, car repossessions or collection actions/judgements for at least the last 24 months. Having such an issue on your report doesn’t automatically disqualify you. It depends on what happened and why. You may still qualify for a loan if you can explain it in writing with supporting documentation.
Setting a budget
This is the most difficult part of the process and consulting a lender is your best option. Aside from credit scores and income, a lender can offer the same type of loan as their competitor down the street but with different criteria. This means that one lender may say you don’t qualify at all or you only qualify for a smaller loan than another lender will offer. Don’t take no for an answer.
Next time we’ll look at credit scores and the options they enable. If you have questions about getting ready to buy a home, reach out: 760 622 5087 or [email protected]