Question: I just signed a one year lease on an apartment but my goal is to buy a house at the end of that year. How do I plan for the purchase of a home?
That’s a great question. Even though you are not looking to purchase for a year, there are some things you can be doing at this time to ensure the process is a smooth one for you. First and foremost is to talk to a lender. Most people have a general idea of their credit but to ward off surprises, this is a necessary first step.
A good lender will tell you how to resolve any credit issues and help raise your credit score. For minor credit issues, your lender will advise you on what you need to do to help you get qualified for a home loan.
The goal is to get your credit score as high as possible so that you can qualify for the best interest rate possible. Stay current with any debt you have. Pay your rent and your utilities. Falling behind in any of these areas can make qualifying for a home loan a lot harder.
Also, keep in mind you will have costs associated with buying a home. There will be your down payment, closing costs, property taxes, home owners insurance, and inspections, to name a few. You will want to make sure you are saving for these items. Of course, your buyer’s agent may be able to help you negotiate some of these items, but you should still plan on having a nest egg.
If you are thinking you want to make that jump from a renter to a home owner, it’s never too early to start the dialogue with a Buyer’s Agent. In fact, you should interview agents and identify the value an agent can bring you in the planning and execution stages. The result should be that your agent has put all the proper tools in your hands, is experienced enough to help you make a great investment and negotiate you the best deal.
The next year will go by so quickly, and timing will be important if you have to have a place to move into by the end of your lease. A good agent will be able to make this process as smooth as possible for you. Buying a home does not have to be a stressful situation and an experienced agent will help set realistic expectations and keep things moving along for you.