Get a Jumpstart on Your 2022 Home Purchase

Are you intent on buying a home in 2022? It’s still a great time to get in the market, but you should be prepared. Sellers continue to have an upper hand, and buyers need to be ready to beat out the competition. If you’re getting ready to buy a home, here’s what you need to do now to set yourself up for success later this year.

Check your credit report

The first thing you should do when you’re thinking about buying a home in the near future is to order a copy of your credit report. Aim to do this anywhere from 6 – 12 months before you apply for a mortgage. This gives you ample time to check your report for errors and have them removed. It also allows you time to improve your credit score if it’s on the low side. Remember, the higher your credit score, the more likely you are to qualify for a mortgage and the better rate you will get.

Pay off debt

When determining your eligibility for a loan, lenders will look at your debt-to-income ratio (DTI). This is the percentage of your income that goes toward paying debts. Most lenders are looking for a DTI that is less than 43 percent. You may still qualify with a higher percentage, but you’ll need cash reserves ready or a really high credit score to compensate. If your DTI is more than 43 percent, work on paying off some of your debt before you apply for a loan.

Start stashing cash

You’re going to need money for a down payment, and the more you can save the better. If you’re applying for a conventional loan, aim to have at least 20 percent of the purchase price ready to put down. If you’re hoping to qualify for a government-backed loan, like an FHA or VA loan, then you may need as little as three percent down (or in some cases none at all). But remember that if you don’t put down at least 20 percent, you’ll need to pay for private mortgage insurance (PMI). Also keep in mind closing costs when saving for your home purchase. These are commissions and fees paid when you close and are usually between 2 – 5 percent of the amount of the loan.

Know what you can afford

In today’s market, you need to know exactly how much house you can afford. This allows you to set your budget and refine your home search to those properties that only fall within your range. This will also help you know how much money you need to have saved for a down payment. Also keep in mind that you’ll have monthly maintenance costs that come with homeownership.

Shop around for a mortgage

Finally, it pays to shop around for a mortgage. Different lenders will offer different loan terms and rates. You could save yourself thousands of dollars over the life of the loan by shopping around. As with any large purchase, know your options so you can choose the best one for your specific needs.

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Get a Jumpstart on Your 2022 Home Purchase

The Bergamini Group

The Bergamini Group is a dedicated team of agents and staff with one thing in mind “YOU”. We believe in serving our clients by doing the job they hire us to do and doing it right. You can trust our experienced team of sales associates to represent you professionally and expertly throughout all phases of the home buying and selling process. We tell the truth, even though it hurts. We strive to provide the highest level of customer service to our clients with honesty and integrity. You may not like what we have to say, but it will be the truth. Our goal is to find you your dream home.