5 Things to do Right Now to Prepare to Buy a Home in Sacramento This Winter

Winter is often a terrific time to buy a home but not the best time to sell one. This winter, though, that might not be the case. This winter is shaping up to be more of a seller’s market than ever before because of the current low inventory and intense buyer competition for for-sale houses. Therefore, in order to compete, winter purchasers must be ready. So, here are five things you can do right away to get ready to buy a home this winter in Sacramento.

1. Get Your Credit in Order

Probably the first thing you should do to prepare to buy a home in Sacramento this winter is to check your credit and get it in order.

When you plan to purchase a property this winter, experts advise that you should examine your credit history beforehand. To better understand your credit score, you must obtain credit reports from each of the three credit reporting bureaus (Experian, TransUnion, and Equifax). Your credit score affects both your mortgage rate and whether you are qualified for one. Your rate will be lower the higher your score.

Prior to submitting a mortgage application, it is important to verify your credit score at least 6 to 12 months in advance. This will offer you the opportunity, if necessary, to raise your credit score. Additionally, make sure to look for any inaccuracies that could harm your credit score on your credit report because they do occur. Then, focus on fixing those mistakes, which will quickly raise your score.

2. Lower Your DTI Ratio

A related thing to do to prepare to buy a home this winter involves lowering your debt-to-income (DTI) ratio.

The percentage of your total monthly income that is used to pay down debt is essentially what the DTI ratio measures. To determine how much of a mortgage payment you could afford, mortgage companies use DTI. DTI ratios between 36% and 43% are typically preferred by lenders, depending on the mortgage programme.

Certain lenders will permit a larger DTI ratio, but only if “compensating circumstances” are present, such as a very high credit score or sizable cash reserves. However, most purchasers will benefit from lowering their DTI ratio, which often entails paying off as much debt as they can before qualifying for a home loan (such as credit card debt, auto loans, college loans, and so forth).

3. Start Saving for the Down Payment and Closing Costs

And start saving for the down payment now to buy a home in Sacramento this winter. Most conventional loans require at least 3% to 5% down, but experts recommend that you pay 20% of the purchase down in order to avoid having to pay for private mortgage insurance (PMI). 

If the price of your first home is $300,000, you might require a down payment of between $9,000 and $15,000. Closing expenses are another expense that you are accountable for; they typically range from 2% to 5% of the loan amount (or $4,000 to $10,000 on a $200,000 loan). Your lender will want copies of your bank statements when you apply for a mortgage loan to ensure you have enough cash on hand for your down payment and closing costs.

4. Get Pre-Approved Soon

Obtaining pre-approval as soon as possible is another requirement for purchasing a home. The sellers will view you as a serious buyer and give you greater negotiation power if you have a pre-approval letter in hand.

According to industry pros, “Obtaining finance and getting pre-approved for a mortgage are crucial first steps in the home-buying process. It enables you to make an offer as soon as you identify your ideal property and offers you a clear image of how much house you can afford. . . . This procedure is now more essential than ever. . . Before beginning their search, buyers must be prepared to purchase a home.”

If you’re not sure how to go about getting pre-approved, you can consult a Sacramento agent for some guidance. Just call (916) 507-2502 to discover more.

5. Find a Good Sacramento Agent 

One of the finest things you can do to purchase a home this winter is to hire a knowledgeable local realtor who is familiar with the neighborhood market. You’ll need a professional on your side to answer questions and watch out for your best interests because buying a property can be a difficult, daunting process. A skilled negotiator can also assist you in getting the finest bargain.

Finding a good agent, however, may be a time-consuming and laborious procedure. It often entails asking family and friends for suggestions, researching reviews, and then interviewing potential agents. But going straight to an agency known for its knowledgeable, experienced agents is a faster and better option. So get in touch with us right away at (916) 507-2502 if you intend to buy a home in Sacramento this winter.