7 Steps to Prepare You for Buying a House in 2018

Now is the perfect time to “warm up” for the house hunt so you can be ready in the new year. The prep work is basically the same wherever you are looking.

1. Check your credit score

The higher the score the better. FICO scores typically range from 300 to 850. If your score is 740 or above, you’ll get the best interest rate on a loan. A lower rate can lead to saving thousands of dollars in a year. If your score is less than this, start repairing it now. Start paying your bills on time, correct any errors that may be on your report, and get your credit limit raised. You should only use 30% or less of your total available credit and not max it out every month.

2. Don’t open new credit cards

As tempting as it gets to open a new credit card to save at the checkout, resist! Opening a new card may hurt your chances of getting a mortgage or even getting the best rate on a loan. What could save you a few dollars right now, could cost you way more in the long run if your mortgage payments end up higher.

3. Suggest financial gifts for the holidays

Along with a mortgage loan, you will need a considerable amount of cash to buy a house. There are closing costs, a down payment and moving costs. Also, you should set aside money for unexpected costs and repairs.

4. Interview potential real estate agents

You owe it to yourself to show around for the perfect agent. Make sure they are not new or unaware of how to do a specific transaction. The end of the year is typically a slow time for agents, which can lead to them being more accommodating to making an appointment on your schedule.

5. Keep tabs on interest rates

Not everyone gets the same interest rate on a mortgage loan. It depends on your financial situation and the lender that you choose. You’ll want to check interest rates to see if there are any trends and to overall have a better understanding on what you are getting yourself into.

6. Get preapproved

If you get a lender to look over your financials ahead of time and they preapprove you for a mortgage, you will be able to show the seller you can buy their house. You will need to prepare documents, which can be done way in advance to the purchase. The documents you will need are:

Tax returns for the past two years W-2 forms paycheck stubs from the past few months

Proof of mortgage or rent payments for the past year

A list of all debts, including student loans, auto loans, credit cards and alimony

A list of all your assets, like auto titles, real estate, any investment accounts and bank statements.