The weather’s just right, your tax refund is in hand, and there are many more homes on the market compared to a few months ago. Spring may be the best time of the year to buy a home, getting a jump on the horde of summer bidders. Here are a few things to keep in mind.

Begin With Mortgage Pre-Approval

Beating the summer rush won’t mean much if you can’t make an offer on your dream home. So your home shopping should start with your lender. In today’s fast-moving real estate market, sellers often expect buyers to have their financing pre-approved. Most negotiations don’t begin until a seller has seen a mortgage pre-approval letter.

To give you that crucial letter, your lender will need some basic information. This usually includes proof of employment, income tax returns, an accounting of assets and debts, and a qualifying credit score.

Get Your Finances in Order

It’s not as difficult as you may think! Before you head out to open houses, you’ll want to:

  • Double-check your credit report. It’s possible there are errors; one Consumer Reports investigation found that 34% of credit reports had at least one error. If you find a mistake, you should dispute it with each credit reporting company.
  • Pay down your debt. Lenders generally want to see a debt-to-income ratio of 43% or less. So do whatever you can to get your credit card debt, student loan debt, or any other personal loans below that 43% threshold.
  • Make sure you have savings. Do you have enough money for the down payment? Fantastic! You also need to cover the closing costs, which will likely be between 3% and 6% of your loan amount. And don’t forget about moving expenses. Plus, factor in ongoing costs such as property taxes, insurance, homeowners association fees, and more. And none of these costs should leave you without a reserve in the bank for that (almost) inevitable emergency.
  • Understand your budget. Mortgage pre-approval can tell you exactly how much home you can afford. And that’s great. But you also want to take stock of your other financial obligations. Take a hard look at your monthly expenses, and perhaps consider some areas where you could spend more wisely.

Spring is upon us. Make sure you’re prepared for this amazing home-buying season by connecting with a member of the Decker Group team. Contact us online or call us at (972) 591-3097.