Midway Real Estate

Here are seven things you can do to prepare for the home buying process, before you even begin shopping for a home.

1. Learn the home buying steps in advance.
   When you understand the basic steps to buying a home, you will make better decisions along the way. This will help ensure a smoother real estate transaction. Mortgage and home buying lingo is a big part of this, so be sure to read through a few real estate glossaries before you get deep into the home buying process. The last thing you want is to sign a document that uses terminology you don’t understand!
2. Review your debt-to-income ratio.
   This ratio represents your amount of monthly payments (bills) compared to your average monthly income. Debt-to-income ratio is one of the things mortgage lenders will look at when qualifying you for a loan. Most lenders will prefer your debt not to exceed 20% of your net monthly income. If your debt is more than 20% of your income, it’s time to pay down some of those bills. You’ll have a much easier time qualifying for a loan if you do.
3. Set your home buying budget.
   By using a mortgage calculator, you can get a pretty good idea of how much mortgage you can afford to pay each month. This directly corresponds to the amount of home you can afford to buy. Once you have an approximate budget in mind, you’ll be able to limit your home search to those homes that fall within your budget range. This will save you a lot of time and hassle, while keeping your home search financially feasible.
4. Start saving your cash.
   Unless you’ve just won the lottery, there’s a very good chance you’ll need some cash reserves during the home buying process. For one thing, mortgage lenders like to see that you’ve got some money saved for your settlement / closing costs. Secondly, the additional cash will come in handy for moving expenses, furniture purchases, home insurance, and all the other compiling costs that go along with buying a home.
5. Review your credit report.
   Order a copy of your credit report and look it over for errors, inaccuracies, or anything that just seems odd. This is one of the first things a mortgage lender will do when considering you for a loan, so it makes sense to conduct your own review first.
6. Fix credit errors quickly.
   If you review your credit report and find something that doesn’t seem right, go to the company’s website who produced the report (TransUnion, Equifax or Experian) to submit a correction request. These companies are required by law to examine any reported errors on credit reports, and to correct them if necessary. But the process can take time, so you want to stay on top of it to resolve it quickly.
7. Get pre-approved for a loan.
   During pre-approval a mortgage lender will review your credit report, income and overall debt to determine how much of a loan you qualify for. With a “pre-qual” letter in hand, you can be more confident about your buying power in the real estate market. It also shows sellers that you’re serious about (and capable of) buying a home. This can be an important factor if the seller receives offers from multiple buyers, as they will likely consider those who have been pre-qualified above those who have not.

Want a complete Home Buying Checklist, then pick up a copy of the Home Buyer’s Checklist!

Home Buyer's Checklist: Everything You Need to Know--but Forget to Ask--Before You Buy a Home
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Product Description
Everyone who has bought a home knows that an official inspection is no guarantee against unpleasant surprises, and that, ultimately, the burden to ask the important questions about the physical aspects of a home is on the home buyer. But buying a home is one of life's most stressful, emotionally fraught activities, and it's easy to see why many home buyers fail to anticipate the kinds of exasperating and expensive problems that can crop up after closing. Written by bestselling real estate author (more than 1 million books sold) Robert Irwin, Home Buyer's Checklist levels the playing field by equipping home buyers with a comprehensive list of questions pertaining to all the physical aspects of a house that may not be covered in an official inspection. From basement to attic, pantry to lawn, Bob walks readers through every room, nook, cranny, closet and keep, asking important questions about windows, screens, doors and door frames, fireplaces, light fixtures, moldings, and much, much more. And, drawing upon his many years of experience in the business, he provides pointers on how to deal with each problem, including information on how much it will cost to fix, how to estimate its short- and long-term consequences, how it should impact on the negotiating process, and more.
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