Four Steps to Take before Shopping for Your First Home

December 2, 2016

If you’re hoping to buy your first home in the New Year, follow these four steps before you begin house-hunting.

Photo courtesy of Phanlop88 at

Photo courtesy of Phanlop88 at


1.       Hone in on your credit score.  Practically every single purchase you’ve made in your financial past comprises your credit report, and its overall score impacts your entire financial future.  Your credit score is an indication of how likely you are to pay back the debt you owe based on your past purchasing and borrowing behavior.  There are five factors that impact your credit score:

  • Payment history (35%)
  • Debt (30%)
  • Credit history length (15%)
  • Credit mix (10%)
  • New Credit (10%)


FICO scores range from 300 to 850 and a score of 740 and above typically guarantees you a lower mortgage interest rate.  An interest rate variance of only 1 or 2% lower can result in saving thousands of dollars per year.  If your credit score falls short, take steps to boost it now.

2.       Suggest financial gifts to family and friends.  Share your home ownership plans with loved ones and politely suggest that they contribute to your home fund in lieu of traditional gifts this year.  If they already own homes, they understand the enormity of this financial investment and will most likely be happy to help.  If you fear it may feel uncomfortable to propose a financial gift, consider the total cost of purchasing a home.  Beyond the mortgage loan, you’ll need a significant amount of cash to cover closing and moving costs.  In addition, it’s important to create a cushion for unforeseen repairs.  This lack of preparation among millennials is most likely why almost half of them incurred up to $5,000 in unexpected costs during the mortgage process, according to a recent TD survey.

3.       Assemble your team of experts.  Shop around for the best in the business before you start house-hunting.  Ask your friends and family who live in the area if they have a real estate agent and mortgage lender to recommend.  Then, take time to interview them.  The holiday season is typically a slow time for these real estate experts, so they should have plenty of time to spend with you.  At Expert Title Insurance Agency, our team of experts provide the highest quality of professional support and service available in the industry.  We answer questions such as, “What happens if there is a lien on the apartment I want to buy?” every day.  Your mortgage lender will help you determine how much home you can afford and complete the next critical step to homeownership in NYC.

4.       Procure a pre-approval letter.  Competition is still fierce in popular neighborhoods.  Providing a pre-approval letter goes a long way once you ultimately decide to make an offer on the home of your dreams.  Your mortgage lender will be able to pre-approve a mortgage amount based on various criteria and help you determine if you should save for a larger down-payment, and if not, which mortgage product is ideal for you. 

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