When thinking about buying a home, many people begin their search by surfing hundreds of websites and discovering the vast options of homes right at their fingertips. Sure, it’s exciting and fun to look at all the different styles, neighborhoods and interior designs available to get a sense of what your likes and dislikes are, but that’s just a starting point.  

Purchasing a home is one of the most important financial investments a person will make in their lifetime, so when deciding to do so, there needs to be proper planning involved to get ready.

Here’s how to do it:

1. Credit Score: All mortgage lenders will evaluate a person’s credit score, so it’s important to pay down debt and clean up your credit report so that you’re able to get the highest score possible.  Any mortgage lender should go over your report in detail and provide suggestions, if needed, to repair any damaging items that may hinder you from getting a bank pre-approval letter. Start this process approximately 3-6 months before you plan to buy.
2. Interest Rates/Mortgage Terms and Types: Mortgage lenders may differ in what their minimum standards are in terms of credit score eligibility, however, depending on how high the score is and what your mortgage term and type may be will usually impact the interest rate. There are various options and qualified programs that should be explored with your loan officer so that you can ensure you’re getting the best rate, discounts and terms available. It may be wise to shop at least two to three quotes before making a decision. The smaller the amount of risk the bank takes the better it is for you, the borrower. More money down, high credit score, low debt to income ratio, employment stability and substantial savings means more money in your pocket!
3. Save Money: Get a nice cushion of money saved in your bank account so that you’ll have adequate funds for a down payment, closing costs, allowance of future repairs and possible unknowns for the future.  
4. Purchase within your means: Just because you may get pre-approved for a certain amount doesn’t mean you need to buy that high. As you’re shopping, keep in mind what a comfortable/affordable mortgage payment would be based on your household income. This should provide more flexibility and peace of mind in the long run.
5. Cash: Purchasing with cash and providing proof of funds will give you the most leverage and purchasing power overall. Cash transactions can usually close faster and are more desirable and likely to get accepted offers in real estate deals.

There is amazing development and growth in our city right now. For most Americans today — and specifically Philadelphians — their home has become their biggest financial asset. For those not buying homes, this benefit will be lost. Take advantage of the spring market and lower interest rates while you still can.