What are some important steps on a homebuying checklist?


Quick Answer

One of the first items on a home-buying checklist is to pay down debt and raise the credit score, according to U.S. News and World Report. Having a good-to-excellent credit score raises the likelihood of loan approval and increases the chance of obtaining the best interest rate.

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Full Answer

Another step on a home-buying checklist is working toward having 20 percent of the projected purchase price saved as a down payment, states U.S. News and World Report. In addition, those in the market for a home should consider their budget and home-ownership expenses beyond mortgage and interest, such as property taxes, homeowner association fees or an increase in utility costs. A homebuyer's checklist also includes deciding whether an adjustable-rate or fixed-rate mortgage works best. While adjustable-rate mortgages are risky, considering interest rates may rise, they may benefit a consumer who plans to sell the home in a short time. Individuals must also decide their preferred term for a mortgage: 15 years, 30 years or somewhere in between.

Once homebuyers make decisions concerning finances, they need to gather income tax forms from the past couple of years, recent paycheck stubs and other paperwork a mortgage lender may require, such as student loan or credit card information, notes U.S. News and World Report.

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