Prepare, Prepare, Prepare that's what you do.
1st. find out what your credit score is. You qualify for a free credit report each year but that does not tell you what your score is. Clark Howard my favorite talk radio guy provides a link for your report below: http://clarkhoward.com/topics/freecreditreportinfo.html
You can get your score at www.myfico.com. They also provide you with some great tools to show you how much money a good credit score can save you. Or you can contact a lender and get them to pull your credit score.
Great thing about that is they can tell you what actions will improve your credit score and you can go to work on that right away. Move your credit score by more than 50 points could save you over a $100 a month for the next 30 years. Thats alot of cash. Think of it this way. Thats dinner out for two, twice a month. Get to work.
2nd Do not acquire any more debt. Reduce your credit card debt. Credit companies like to see you using less than 40% of your available debt. So if you have a credit limit of $1,000 on a credit card you should not have an on going balance of more than $400 on the card.
3rd Save additional monies for your inspections. Every buyer should have two inspections completed. Home inspection run around $300 to $450 and a WDO or Termite inspection is around $150. If you home has a septic or well.... Septic Inspection under $400 but can save you $5,000, and Water test is around $100. These inspections will usually save you that much and more so they are worth your money.
4th Prepare for your Escrow Deposit. At the time you write an offer to purchase you will be required to place what is known as "good faith money" in an escrow account it will be held by Realtor Office or a Title Company. This money means you will live up to your end of the contract and purchase the house according to the provisions of the contract. This money will come back to you as a credit at your closing but if you do not purchase the house you could lose it. Normal escrow amounts are 1% of Sales Price. i.e. $200,000 home escrow should be $2,000.
5th Begin shopping on line to get a sense of what homes are going for. Now is a good time to look for a Realtor to work with. They can feed you properties in you target area. Find a few homes you like and watch the sales cycle. How long did it take to get a contract on it (go pending in real estate terms). How long did it take to close. What did it actually sell for. Did it have multiple offers on it. Your Realtor should be able to provide you with that info.
6th Monitor your credit report and challenge those items that are negatively affecting you score. This should be a life long process. This is the time to get with a lender and have them develop a Pre Qual Letter. That is saying the lender would lend you up to a certain amount of money to buy a home. This is standard in our industry and every banker/lender should understand this. We have six on our web site under the button explaining Pre Qual http://www.4homesinflorida.com/GetPre-qualified.
They will provide you with a link to input all your information then pull your credit and email your Pre Qual to you and your realtor. At that point you are ready to go looking at homes. Also ask the lender for their fee's...Appraisal fee normally around $450, and lender fees range from $3,000-$4,000. That is not including how much you need to put down, meaning lenders do not 100% finance. The least amount you can put down is .5% and to not have private mortgage insurance 20% is required.
7th Closing costs will also have some prepaids that provide the Bank enough money to pay your home Insurance and Taxes so you should have that put away or negotiate it into the contract if possible.
Doing those 7 things will prepare you for a successful home hunt. Good luck. Call us if we can help.