Don't forget that good credit also means job stability. Most lenders require that you work for the same employer for at least a year, and maybe two, before they'll approve your home loan application. If you're self-employed, they'll want to see at least two years of tax returns before you'll qualify for a conventional loan. If you're offered a better job in your field, by all means take it. But if you want to buy a home, try not to jump from job to job to job within a relatively short period of time, particularly if the job changes are in different industries.
If you want to buy a house next year, pull a copy of your credit history and credit score. Try to reduce the amount of personal debt you have, including credit card debt, student loans and auto loans. While having personal debt doesn't mean you can't qualify for a loan, it will lower the amount of the mortgage a lender might be willing to give you.
Federal law now requires each of the three main credit reporting bureaus (Experian, Equifax and Transunion) to give you a free copy of your credit history once a year. To get yours, go to annualcreditreport.com.
Know how much I can afford to spend before shopping for a home You have three options when it comes to figuring out how far your down payment and income will take you: You can guess. You can pay a visit to your local lender, who will pre-qualify or pre-approve you for a loan. Or you can go online.
Your lender will look at your income, debt, assets and liabilities and come up with the maximum amount you can spend on a home. Once you know how much you can afford to spend, you'll avoid making a common, heartbreaking home buyer error: Looking at homes you can't afford to buy.
Know my neighborhood, and be comfortable with it, before I buy a home there Everyone wants to live on the best block in the best neighborhood. Unfortunately, that location may not be in your budget. Balancing affordability with location means you will have to compromise.
Start looking at various neighborhoods and the amenities they offer. Is there a park? Shopping? Transportation? A house of worship? Do your friends and family live close by? Be careful not to limit your choice of neighborhoods too early in the process.
Spend time during different parts of the day and night in the neighborhoods you like. Visit the neighborhood police department and local schools. Stop by the local park district offices and see what programs and classes are available. Drive the commute from prospective neighborhoods to your job during rush hour.
