It's never too early to start preparing to purchase a new home. Even if you aren't going to start shopping for your first home until next year, there are steps you can take now to get ready for the mortgage process.
Familiarize yourself with the market
Before shopping for a new home, you'll want to know what price range you're comfortable with, what neighborhood you'd like to live in and what home features you consider "must haves". Any popular real estate app will allow you to search various neighborhoods and view what's currently on the market. You may find that your desired price point is too low for a particular neighborhood unless you downsize drastically, or you may find that what you considered "must-have" features aren't as important as you thought. It's also a good idea to visit any prospective neighborhoods in person so you can decide if it is truly the right neighborhood for you and your family.
Build up your savings
Before being approved for a mortgage, you'll need to be able to show your ability to pay a down payment for a new home. While 20% used to be the standard, 54% of all home buyers paid less than 20% towards a down payment for their home, reported the Los Angeles Times. That being said, you'll still want to have enough in savings to be able to contribute toward the down payment that is required and also cover any repairs or maintenance needed on your new home.
Work on your credit score
Mortgage approval hinges heavily on your FICO credit score. To increase your credit score, you'll want to make sure all of your bills are paid on time, your debt-to-income ratio is at a reasonable level, and you have no accounts in collections. Check your credit score by requesting a free credit report, which you're entitled to receive once a year. If your score is lower than 700, it may be worth contacting a credit repair consultant or reading up on how to increase it.
By starting these steps now, you'll be ready to go when it's time to start house shopping.