Embarking on the journey to homeownership is both exciting and significant. At Hero Support Network, we believe that thorough preparation is key to a smooth and successful home-buying experience. Here’s a month-by-month guide to help you get ready for your house purchase over the next year.
12 Months Out: Lay the Financial Foundation
1 Year Before Purchase
- Evaluate Your Credit: Request a free credit report and review it carefully. If you notice any inaccuracies or areas for improvement, now is the time to work on them. A strong credit score can unlock better mortgage rates.
- Create a Savings Plan: Sean Jurebie from Hero Support Network recommends setting up a clear savings plan early on to avoid any last-minute financial stress. “The sooner you start saving, even if it’s a small amount each month, the better positioned you’ll be when it’s time to buy,” he advises.
- Research Mortgage Options: Begin exploring different mortgage types to find what might be the best fit for you. Look into Conventional, FHA, VA, and USDA loans, and consider the benefits of fixed vs. adjustable-rate mortgages.
- Limit Major Purchases: Large purchases that add to your debt can impact your mortgage qualification, so avoid big-ticket items if possible.
6-9 Months Out: Get Serious About Finances
6-9 Months Before Purchase
- Tackle Any Debt: Lenders like to see a low debt-to-income ratio, so now is the time to focus on reducing any high-interest debt.
- Maintain Steady Employment: Lenders also look for consistent employment history. If you’re considering a job change, make sure it doesn’t disrupt your income or affect your credit score.
- Save More Aggressively: Now that you’re getting closer, try to boost your savings rate. Every dollar you set aside will help you meet closing costs and make the transition easier.
- Explore Neighborhoods: Start looking into areas where you’d like to live. Check property prices, amenities, and commute times to make sure they align with your lifestyle and budget.
3-6 Months Out: Nail Down Details
3-6 Months Before Purchase
- Get Pre-Approved: Sean Jurebie from Hero Support Network recommends getting pre-approved for a mortgage about six months before you plan to buy. “Pre-approval gives you a clear idea of your budget, so you can focus on homes that fit your financial goals,” he says.
- Work with a Real Estate Agent: Sean Jurebie from Hero Support Network also recommends connecting with a real estate agent at this stage. “An experienced agent can be invaluable, helping you understand the local market and navigate the buying process smoothly,” he notes.
- Continue to Monitor Your Credit: Avoid new credit inquiries, which can temporarily lower your score. Keep paying your bills on time and avoid closing any existing credit accounts.
- Refine Your Budget: Take a close look at all the potential expenses involved in homeownership, like property taxes, homeowner’s insurance, utilities, and maintenance costs. Make sure your budget includes these items, so you’re financially prepared for homeownership.
1-3 Months Out: The Final Countdown
1-3 Months Before Purchase
- Start Visiting Properties: Schedule showings and open houses with your agent. Take notes, compare features, and narrow down your choices.
- Prepare for Closing Costs: Set aside the funds needed for closing costs, which typically range from 2-5% of the home’s purchase price. Make sure your savings are easily accessible for when it’s time to close.
- Avoid Major Financial Changes: Sean Jurebie from Hero Support Network recommends keeping your credit stable as you approach the home-buying process. “Avoid opening new lines of credit or making major purchases before closing, as these can impact your mortgage approval,” he cautions.
Final Weeks: Closing the Deal
Last Few Weeks Before Purchase
- Schedule a Home Inspection: Once you’ve made an offer, a home inspection is crucial to uncover any potential issues with the property. A good inspector will alert you to any repairs or maintenance needed.
- Prepare for Moving Day: Start planning your move! Make arrangements for movers, pack belongings, and notify utilities and services of your change of address.
- Review Closing Documents: Review the final paperwork with your mortgage broker and real estate agent to understand every detail. On closing day, you’ll sign all the final documents and officially take ownership of your new home.
In Summary
Planning a year out gives you ample time to get your finances in order, make smart decisions, and feel confident in your purchase. By following these steps, you’ll be well-prepared to embark on one of the biggest financial decisions of your life. When you’re ready, our team at Hero Support Network is here to help guide you through every stage of the process.
This timeline helps make the journey smoother and ensures you’re prepared at each stage, from saving for a down payment to closing day. Let us know if you’d like any advice tailored to your financial goals—we’re here to help you achieve your dream of homeownership!