Are you one of the many Americans dreaming of buying your first home, but don’t quite feel ready? People delay homeownership for many reasons; some are unsure where to settle down, some have poor credit and fear they won’t get approved. As a mortgage company, we understand that every person has a different path to homeownership. If you foresee a home purchase in the next few years, now is the best time to start preparing, and we’re here to help! 

Just as with any project, your preparation will set the stage for your success. Think of your first homebuying experience as your largest personal project yet!  

Step one: Identify Your Goal 

*Phew*, that one was easy! You’ve already completed step one, your goal is to purchase a home. 

Step two: Research  

Have you made a choice about where you’d like to live? Researching towns is an important part of the process. You will want to evaluate average home prices for the area, consider potential property taxes, crime rates, and school ratings, and, more personally, determine the proximity to amenities that are important to you. 

Step three: Set a Timeline 

Just like registering for a race inspires a runner to kickstart their training, establishing a homebuying timeline can help a prospective homebuyer kickstart their preparation! Most importantly, be sure to set a realistic and achievable goal. If your aim is to purchase a home within two years, think about what you will need to do over the next 24 months to make that a reality. Are you allowing enough time to improve your credit score? Is there enough time and money each month to save for an ideal down payment?  

Step four: Take Action 

With a prospective closing date in mind, do your best to stay on track toward your goal: 

  • If you haven't yet, you should check your current credit score. It is wise to figure this out as soon as possible. Once you know, you will be able to see where you need to do work to improve it. Whether it is paying down credit cards, or enlisting the help of a credit repair service, your credit score is crucial to the mortgage application process. It is best to start preparing now! 

  • It is wise to start saving what you can, even though there are loan products that offer little or no down payment options. Remember that there will be closing costs, moving expenses, as well as repairs and furnishings to include in your budget. For a goal of collecting $20,000 over the next two years, you would need to save $833 each month. If you can’t find room in your budget to set that aside every month, consider extending your timeline a bit longer. If someone in your life will be gifting you funds to assist in the home purchase, try to discuss what that amount will be, so you can adjust your own savings plan accordingly. (If you plan to use gifted funds, you will need to have a gift letter documenting it; your Norcom Loan Originator will be happy to assist you with preparing one.) 

Step five: Talk to your Loan Originator 

Following these preparatory steps, you will be in a good place when you are ready to start the official home buying process. When the time is right, talk to a trusted Norcom Mortgage Loan Originator about getting pre-approved!