February 14, 2019
Preparing for a new home loan requires time. Before you start looking at real estate listings, talking to sellers, or begin filling out loan paperwork, you will need to take several steps ideally started at least a year before you begin house hunting.
Begin Saving For Your Down Payment And Other Expenses Now
There are appraisal fees, home inspection expenses, possible flood zone determination costs depending on location, closing costs, and the down payment to think about. Start saving as early as possible for these expenses.
Start Checking Your Credit Reports Now
If you find any items on your credit report that need to be disputed, the process can take many months. Don’t wait until later to take this step, the time you save will be critical later.
You do not want to be fighting identify fraud issues or other problems within months of your loan application-you just don’t know how long the process may take and the lender is required to work with whatever information is in your report.
Do you know your credit score? If not, that is a very important area to pay attention to, but other credit issues include your debt-to-income ratio. That will be just as important as your FICO score at loan application time.
Work On Your Payment History Now
For best results, do not apply for a home loan without 12 complete months of on-time payments on all financial obligations. Doing less than this will jeopardize your ability to get loan approval.
Decide What Your Home Loan Priorities Are
Do you want to save money up front on the loan? Are you more interested in paying more now to save money over the lifetime of the loan? Will you stay in the home long-term or move on in a few years to a bigger house?
These are all considerations that will affect your home choices and your home loan choices. Those looking for a fixer-upper home will apply for a different kind of FHA mortgage than those looking for a mobile home or a construction loan. Decide what kind of property you definitely want to look at (condo, suburban home, mobile home, town house, etc.) and ask your lender which is the right loan for you.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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