Key steps to becoming a smart homebuyer

Going into the housing market to search for a home to purchase can seem intimidating. The market is constantly changing, so preparing ahead of time is key. Taking the right steps can put you ahead of the competition and land you your dream home. 

Check your credit score

If you’re planning to apply for a mortgage loan, it’s crucial to check your credit score to make sure it’s in great shape. Mortgage lenders use this score to get an idea of your debt history, so they can determine if you qualify for their loan. 

On average, a score of 620 is reasonable enough to qualify for a loan, however, this score may make you subject to higher interest rates. A score of around 720 or higher, however, can get you a lower interest rate on your loan, which can save you thousands of dollars during the loan’s lifespan. 

When you check your credit score, keep an eye out for outstanding debts and credit errors. Credit errors can bog down your score, and catching them early can help restore your credit. 

Get preapproved for a home loan

Before you start searching for homes, it’s a great idea to get preapproved for a home loan. Preapproval can help you to better visualize your budget, which helps greatly in narrowing your home search. Often, pre-qualification precedes the preapproval process. And while a pre-qualification letter is excellent, obtaining a solid preapproval letter shows that you and the lender have been working together and come to an agreement, versus just taking the first steps as in a pre-qualification letter.

Hire a real estate agent

Yes, you can search for homes online, but having a qualified real estate agent by your side can help to expedite the process. With their expertise, they can help you to better understand the market in the area you’re searching for a home in and can advocate on your behalf to get the best deal.