Step #3. Check Your Credit
The second step of home loan shopping is checking (and fixing, if necessary) your credit. We talked about this in Chapter 16; not knowing your budget or credit score is a common buyer mistake that you want to avoid. Maybe you haven’t looked into your credit score in a long time, but before you purchase a new home to enjoy the next stage of your life, it’s time to check your credit. As part of this process, obtain your actual credit report. This will provide you with much-needed information so you know where you stand, and gives you a chance to get the best bargaining terms. And fix your credit, if applicable. You’ll need to use a credit repair company, but do your research first to ensure you are working with a reputable (and affordable) company.
Step #4. Consider ALL Expenses
We’ve talked about this before, but as a reminder, in addition to the down payment and monthly mortgage payments for home buyers, you’ll need to consider all homeownership-related expenses. Many buyers forget to do this, even if they’re longtime homeowners who are in the process of downsizing. Keep in mind closing costs, property taxes, homeowner’s insurance, and maintenance costs — and then budget for them!
Step #5. Understand Mortgage Rate Locks
“Obtaining the lowest available interest rate on a mortgage should be every prospective homeowner’s objective,” says Lisa Smith from Investopedia. The reason is simple: Lower interest rates mean lower monthly mortgage payments, which means affordability in the short term, and significant savings over the long term, which is good news for
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