Buying a new home is such an exciting process that it is tempting to just jump right in and get started. Before you do, however, it is helpful to take a step back and make sure that you have all of your financial details in order. Here are some of the most important steps to take before you begin searching for Henrico, VA homes for sale:
Step #1 – Check Your Credit Report
Your credit score is one of the primary factors that banks look at when they are deciding whether or not to give you a loan. It also plays a key role in determining the amount of interest that you have to pay on your loan if you get approved. Having a high credit score can not only make it easier to qualify for a mortgage but can also wind up saving you thousands of dollars in interest over the life of your loan.
Before you even think about applying for a mortgage, you should pull a copy of your credit report. Review all of the information to make sure that it is accurate. Dispute any inaccuracies so that you can have them removed from your report. If you have credit cards with high balances, consider paying them down a little bit. Lowering the amount of available credit that you are using can quickly boost your score.
Step #2 – Make Sure You Have Enough For A Down Payment
Ideally, you should wait until you have at least 20% of the purchase price saved before buying a home. If you put less than 20% down, the lender will require you to carry private mortgage insurance, which can add a significant amount to your monthly payment. Not only that but taking out a smaller loan is a good way to keep your mortgage payments as low as possible.
Step #3 – Get Preapproved For A Loan
During the preapproval process, lenders carefully evaluate your finances to come up with an amount that they are willing to lend you. Getting pre-approved will help keep you from looking at houses that are more expensive than you can afford. It also makes it easier to act quickly when you find a place that you love.
Before you even begin looking at houses for sale in Henrico, VA, you should follow all of these steps. By making sure that your credit report doesn’t contain any errors, saving up a large down payment, and getting pre-approved for a loan, you can get your home search off on the right track.