Buying a home can be an emotional roller coaster ride. From excitement, anxiousness and then a combo of both on closing day.
If you’re planning on buying a home within the next 12 months, do the following:
1. Check Your Credit: Aim for a credit score of at least 620 to qualify for most loans. Lenders look at scores from all three credit bureaus and use the middle one. While there are options for lower scores, those come with higher interest rates, so it’s worth the effort to boost your score.
2. Plan for Your Funds: Know exactly where your closing funds will come from. Whether it’s savings, proceeds from selling a home, or help from family, have a clear plan. And no, pulling cash out of your “secret stash” at home won’t cut it—lenders need traceable funds.
3. Account for Closing Costs: Closing costs are separate from your down payment and typically range from 2% to 4% of the purchase price. First-time buyers may qualify for conventional financing requiring as little as 3% down. There are also government loans with 3.5% down for FHA, and even 0% down for veterans.
Interest rates are slowly improving after taking a hit in October. While rates are important, I always advise my clients to focus on the big picture. Can you comfortably afford the payment today? Do you love the house enough to make the move? If the answer to both is yes, don’t let the current market scare you away from taking the next step. You can always refinance to lower your monthly payment, but you can’t go back and lock in today’s home price.
If you’re ready to take the first step and get ahead of the game in 2025, I’m here to help.
With Love,
Emily Costin with Mullinix Mortgage
emily@mullinixmortgage.com
