Purchasing a home involves much more than just finding it. If you’re considering buying a new home in Canton, Michigan in 2017, there are several steps you can take now to stay ahead of the game. Here are some practical preparations you can make to get your finances in order so that when you do find your ideal home, you can pursue it without delay.
Know Your Credit Score
Credit scores fall between 300 and 850, and the higher your score is, the better interest rate you will be able to get on your loan. You can check your credit score by looking at your credit card or other loan statements. Most companies provide updated credit scores for their customers on monthly statements through the mail or via online accounts. If your company does not provide this, the CFPB (Consumer Financial Protection Bureau) offers a list of alternative ways you can find your score. If your score is not as high as you would like, consider consolidating your debt while working to pay it off.
Avoid Large Purchases
Since a solid credit score is a vital component in obtaining a favorable loan and a low interest rate, you won’t want to take any chances by changing your credit profile. It’s a good rule of thumb to avoid opening new credit cards or making large purchases up to six months before buying your new home.
Research Reputable Lenders
Once you know your credit score and how to guard its integrity, the next step is finding a reputable lender. Since you are looking into buying a new home in Canton, Michigan, one great way to find a lender is to ask a builder you trust. Builders often have a group of preferred lenders with whom they work regularly. Often times you can find this information on a builder's website. Working with a builder to find reputable lenders will help ease your burden and streamline the process of securing the best loan and interest rates. You can prepare for this immediately by using this mortgage calculator.
Prepare Your Mortgage Documents
Before you meet with a lender, you will want to have assembled all the documents you need to be preapproved for a mortgage. These documents vary from lender to lender, but at a bare minimum typically include: thirty days of pay stubs, two years of federal tax returns, two years of W-2s, proof of mortgage or rent payments for the past year, a document listing your debts, and a quarterly statement of all asset accounts. These include checking accounts, saving accounts, and investment accounts. HSH provides an elaborative article on the documentation process.
Don’t Try to Game the Market
Finally, as you prepare to invest in real estate in Canton, don’t try to "game the market" by waiting to buy until you think it's best for buyers. If you do, you will likely never buy, and you may well miss out on your ideal home. In fact, you may even miss out on special offers that are home-builder specific. For instance, Evergreen Homes is currently offering $15,000 in free upgrades on a purchase of a new home in their Torrey Hill Community, an offer you might miss by trying to wait for the perfect market moment. Keep in mind that the market goes through cycles. Go ahead and buy your home with peace of mind, knowing that even if the market takes a dip after you buy, it will rise again.