If you are planning to buy in the next year, now is the time to begin putting everything in order and establish a timeline for the critical choices you’ll need to make in order to become a homeowner in the next 12 months.
To ensure a smooth and successful homebuying journey, here’s a comprehensive one-year plan to guide you through the process.
12 Months Before: Set Your Budget and Save
Start by evaluating your financial situation. Determine how much you can afford by calculating your monthly income, expenses, and existing debts. Establish a realistic budget that includes not only the home purchase but also associated costs like property taxes, insurance, and maintenance.
Simultaneously, begin saving for your down payment. Aim for at least 20% of the home’s purchase price to secure favorable loan terms. Consider setting up a dedicated savings account to track your progress and prevent any temptations to dip into your home fund.
9 Months Before: Check Your Credit Score
Your credit score plays a crucial role in securing a mortgage with favorable terms. Obtain a copy of your credit report and address any discrepancies or outstanding debts. Work on improving your credit score by paying bills on time and reducing outstanding balances.
6 Months Before: Research Neighborhoods and Mortgage Options
Start researching neighborhoods that align with your lifestyle and preferences. Consider factors such as commute times, local amenities, schools, and safety.
Simultaneously, explore different mortgage options. Consult with lenders to understand the types of loans available and the interest rates associated with each. This knowledge will empower you to make informed decisions when the time comes to secure a mortgage.
3 Months Before: Get Pre-Approved for a Mortgage
Now that you have a clear understanding of your budget, credit score, and preferred neighborhoods, it’s time to get pre-approved for a mortgage. This step provides a realistic view of how much you can borrow and strengthens your negotiating position when making an offer.
1 Month Before: Hire a Real Estate Agent and Start House Hunting
Engage the services of a reputable real estate agent to guide you through the final steps. Ask friends and family for recommendations and read reviews. You are trusting this individual with a significant investment — you should feel 100 percent comfortable working with them.
With pre-approval in hand, start the exciting process of house hunting. Attend open houses, explore neighborhoods, and visualize yourself in potential homes.
Closing Day: Seal the Deal and Celebrate
After finding the perfect home, work closely with your agent to finalize the paperwork and complete the closing process. Once the keys are in your hands, celebrate your homeownership achievement!
By following this one-year plan, you’ll not only be well-prepared for the homebuying journey but also increase your chances of securing the home of your dreams. Good luck on your exciting adventure!