The weather is heating up, and you’re finally ready to take the plunge into shopping for a new home. But where do you start? Do you start driving around looking for houses with sale signs? Do you even know what you want or should look for? In this new series of blogs, I will discuss each stage of the mortgage process, from getting your finances in order to settling into your new home. Hopefully, by the end of this series, whether it’s your first home purchase or your third, you will have learned a little something to make your new home journey a more enjoyable one.
Step One: Get Your Finances in Order
Before beginning your home shopping journey, your first step should be to review your credit report, and boost your score if it needs it. You can pull a free report from annualcreditreport.com to see if there are items that need to be addressed. You’ll want to pay off any and all collections on your credit report. Next, if you have credit card debt and owe a balance of more than 30%, you should consider paying down the balance. Large payoffs may not feel ideal before getting a mortgage but will benefit you in the long run. Cleaning up your credit can help improve your chances of getting approved at a better interest rate and higher loan amount, all of which can save you money in the long run. Astera CU has financial coaches onsite that will meet with you to discuss a financial path to help build your credit score. Call us at 800.323.0048 and ask about our EmpowerMe Financial Program for more information.
Step Two: Get a Pre-Approval
Once you’ve worked on your credit report, the next step is to get a mortgage pre-approval. A pre-approval will give you a general idea of how much home you can afford. We all know what our dream home looks like, but it’s essential to stay within a budget you can afford. A pre-approval will not only help you shop within your budget but will save you from looking at houses you can’t afford. Keep in mind a pre-approval is not the final approval. Many steps follow in the mortgage process before finalizing the loan, and a pre-approval gives you an idea of what sort of loan you qualify for.
Step Three: Shopping for Your New Home
Step three is easily the most fun, and exciting part of the entire home shopping process, which is good, because everything after step three can be stressful. When I was shopping for my current home, I looked at maybe 25 different available homes. This number can be lower or higher based on how many homes are on the market and what your budget is. Not every house is going to excite you, but every house teaches you something. The more houses you look at, the more you realize what you like and what you don’t like. Having a big yard may sound like a great idea, until you see it in person and realize how much yard work would be required to maintain it. Have kids? You will want to inspect stairs, outside fencing, and even the surrounding neighborhood. Any minor factor can make a huge difference in your long-term happiness. Finding a realtor to assist in finding homes to look at can help alleviate a lot of stress and legwork.
These are just the beginning steps of an exciting and sometimes stressful home shopping process. Astera has onsite financial counselors to help you prepare for your mortgage journey, and we have a Mortgage Origination Officer who is eager to sit down and discuss mortgage options with interested buyers. Check back next month when I will focus on the next three steps of your new home journey.
Astera Credit Union