Are you thinking of buying a home in 2023? If so, you’re probably wondering what steps you can take to make it happen. Here are 5 tips to help you reach your homebuying goals this year:
1. Work on your credit
One of the most important factors that lenders look at when determining whether to approve a mortgage is your credit score. The higher the score, the better the interest rate, the costs to obtain a loan, and the products available to you. To improve your chances of getting a good mortgage rate, take steps to improve your credit score. This might mean paying off credit card balances, disputing errors on your credit report, or taking other steps to demonstrate to lenders that you are a responsible borrower. There are many free tools out there that will provide you with a free credit report to give you the overall picture of your credit.
2. Plan for your down payment
Another important factor to consider when buying a home is the size of your down payment. A larger down payment can make it easier to qualify for a mortgage and can also result in a lower interest rate and avoid having to pay mortgage insurance. Start planning now to save up for a down payment, and consider options like a first-time homebuyer program or a grant that can help you afford the down payment. Also, understand that 20% is not required to purchase a home. In fact, the average down payment last year for first-time homebuyers was 6%…14% for all homebuyers, and 17% for repeat homebuyers. The 60+-year-old buyers were the only ones to average 20% or more.
3. Schedule a consultation with a real estate agent
Finding the right home can be a daunting task, but a good real estate agent can help you navigate the process. An agent can provide you with valuable advice, help you find properties that meet your needs, assist you with the negotiations to ensure you get the best price, and assist you with the paperwork required to purchase a home.
4. Prioritize wants and needs
When you’re looking for a home, it’s easy to get caught up in all the features you want and forget about what you actually need. Make a list of your must-haves and prioritize them so that you can focus on finding a home that meets your needs. Make sure to share those needs with your agent. We’ve even seen some of our engineering clients apply weighted values to their must-haves and whichever home had the highest value was the one that made the most sense for them. Too extreme? Have your checklist ready to go at the very least and don’t be afraid to bring it with you to the showing appointments.
5. Get pre-approved
Once you have a good idea of how much you can afford, and you’ve planned for your down payment, get pre-approved for a mortgage. This will help you narrow down your search to homes that are within your budget and will also make your offer more attractive to sellers when you find your dream home.
Buying a home is a big step, but with the right planning and preparation, it can be a smooth and rewarding experience. By following these tips, you’ll be well on your way to reaching your home-buying goals in 2023.