Financial Advice
Rich Best has spent 28 years in the financial services industry, as an advisor, a managing partner, directors of training and marketing, and now as a consultant to the industry. Rich has written extensively on a broad range of personal finance topics and is published on several top financial sites. Recent books include The American Family Survival Bible and Annuity Facts Revealed: What You MUST Know Before You Invest.

What Should I Be Doing Now if I Want to Buy a Home in Six Months?

What Should I Be Doing Now if I Want to Buy a Home in Six Months?

To find the right house in a hot market, make the best deal and then sail through the mortgage process, preparedness is the key. Waiting until the last minute to get all of your ducks in a row could result in unnerving delays and even disappointment. If you plan on buying a house in the next six months, here’s what you need to be doing right now.

Get Your Credit in Order

Your future home purchase hinges almost entirely on your credit standing. If you want to keep your costs down, you will need to boost your credit score as much as possible. You may want to start sooner than six months because it can take longer to correct mistakes on your credit report or pay down debt to improve your credit utilization ratio. Depending on where your score sits right now, a 10 or 20 point increase could mean a half to one-point difference in your interest rate. 

Look for the House You Need (Not Necessarily What You Want)

In the days of rapid appreciation, it was easy to stretch your budget to buy that house with the extra room because the equity could pay for it. These days, buying too much house is likely to turn your finances upside down. As you price your future home, stay within the strict debt-to-income ratios that dictate that your total housing and debt expense should not exceed 38% (or lower) of your income.

Get Your Down Payment Together

While it is still possible to get 10% loans (or lower), the bigger your down payment, the better if you want to keep your monthly payment low. If you can’t afford a 20% down payment, start exploring low down payment loans, such as FHA loans. They do come with certain restrictions and added costs, so it would be essential to know your options.

Find a Local Expert

Getting information and guidance on your home purchase is easier than ever with so many online resources, and you should avail yourself of as much of it as you can. But there is no substitute for local expertise. Teaming up with the right realtor can give you the edge you need when it comes time to make final decisions. The best source for top real estate professionals is referrals from people you know who have had a good experience.

Shop with Confidence

When it is time to go house hunting, having a pre-approval in your pocket changes the whole game. You can walk into models or open houses knowing what you can afford, and realtors will take you more seriously when you begin to talk price. It can also save you time because you will know the upper range of prices you can consider.

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