Make 2024 Your Time to Purchase a New Home: 3 Easy Steps to Prepare

The new year won’t be that much different for homebuying in that you still have main criteria to meet. Here’s 3 ways to prepare.

Get Pre-Approved

A mortgage pre-approval shows you how much home you qualify for. The best time to get a pre-approval is before you start house hunting. This can be two months or a year in advance — whatever makes sense for you. Pre-approvals are a dress rehearsal for your mortgage and are necessary to make a serious offer on a home. Know that pre-approvals don’t guarantee your mortgage approval or interest rate and they typically expire after 90 days. They can be refreshed if you don’t find the home you’re looking for in that time. Once you’ve settled on a lender and applied, the lender will verify all of the financial information provided (checking credit scores, verifying employment information, calculating DTIs, etc.). The lender can pre-approve the borrower for a certain amount. Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, such as finance a car purchase.

Hash Out Your Budget

Aside from the down payment and ensuring your credit score is good, focusing on whether your budget can handle a mortgage is key, says Jeff Ostrowski. “Figure out how much you can set aside for a buffer fund for ongoing or unexpected maintenance costs. Determine the maximum loan you qualify for. Getting preapproved can help. Analyze your monthly budget to make sure you can handle mortgage payments along with your other day-to-day bills.” Also, you should plan on paying at least 1% of your home's value in upkeep costs every year, according to the 1% rule. However, that number will vary.

Find the Right Realtor

Having the right real estate agent is essential for buying a home. Obviously, their expertise and experience are an asset. They know the ins and outs of negotiation, they have deep knowledge of the area, and they are likely connected—in other words, have good relationships with lenders. However, one of the most important reasons to enlist a realtor’s help is their objectivity. An agent will assess your financial situation and your needs and be honest with you about your prospects. This helps you make the best financial decisions.

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Call Lesa Miller at (812) 360-3863 or go online at https://lesamillerrealestate.com/ where you can read her posts on other social media accounts and websites.