The Internet has made shopping for a home easy.  Today's lower home prices and interest rates make buying a smart decision.  The only fly in the ointment these days is getting the loan.  So, to avoid disappointment and make sure you end up with the home of your dreams, do your homework and prepare before you shop.

 How Is Your Credit?

Start with your Credit Score.  If it is over 750 you are in good shape.  If it is not, then take whatever steps are necessary to improve your score.  Maybe you need to consolidate your bills. Maybe you need to reduce your spending and pay more than the minimum balance on your credit card each month.  Now is the time to clean up any past credit problems.  Find out if there are any unpaid bills that need to be paid.  Lenders evaluate your credit history so if you spend too much on a regular basis and have been slow to pay, the odds of getting a mortgage these days are mighty slim.

 What Can You Afford?

When buying a home you need to consider the down payment, closing costs and monthly payments. As for down payment you either have savings you plan to use or possibly you plan to sell your existing home and use the profits from that as a down payment.  Ok, so want about the monthly costs?  This is not that difficult to do.  Simply add up all your income and put it in one column.  Add up all your expenses and put that in a separate column.  Ideally, your income column should be higher than your expenses column but if it is not, you are not likely to be able to get a home loan.  However, assuming that your income/expense ratio looks promising, it is a simple matter to calculate how much of a monthly payment you can afford to make.  There are calculators online that will help you determine this.

 Shop for a Loan Before You Shop for A Home

You can shop for a loan online, check with a local lender or talk to a trusted agent for a referral to a good lender.  It is important that you talk with reputable lenders and get yourself pre-qualified and pre-approved for a loan amount.  This gives you and the seller the confidence that when you put in an offer on a home you can afford that the lender will approve the loan assuming that the property also qualified or appraises for the selling price. 

 Ready To Shop

Now, armed with pre-approval from you lender, you can shop for homes in your price range with every confidence of success.  The Internet abounds with helpful Websites where you can shop for homes without ever leaving home.  For example, in the Evergreen real estate market in Colorado there are over 300 homes listed for sale ranging in price from under $100,000 to over $19 million.  With all the information, photographs and virtual tours online, it is easy to eliminate those that do not meet your standards so you only have to visit the few that catch your fancy.

About the Author:
Noel Markham, MA