Are you prepping (or thinking about prepping) to buy your first home? If so, congrats! Whether the home is for you or as an investment, it always helps to know where to begin with the process — let’s be honest it isn’t the easiest to navigate. Ensuring you are financially ready for your purchase is a great first step. To help with the nitty gritty of what that means, here are a few of the financial fundamentals for first-time homebuyers.
Build Your Credit
Ah credit, our old nemesis! While this may be a step you are familiar with and your friendly real estate agent has drilled it into your brain, it is one that many people simply ignore or overlook. This misstep can cost you in the long run — it impacts the loan you will qualify for, your mortgage rate, and your overall monthly payment. Phew! That’s a lot of factors for one single step!
How do you ensure that your get this step right (or at least put your best foot forward)? There are three easy ways to conquer your credit nemesis:
- Tracking your credit and disputing any errors that show up on your reports. Ensure your credit report accurately reflects your activity.
- Paying your bills on time. This includes making loan payments and paying down any open lines of credit. Auto-pay is your best friend.
- Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.
Automate Your Savings for Your House Fund
Set it and forget it! Banking institutions are catching up to the needs for automation (so you can do other things!) — ensure a portion of your paycheck is automatically directed to a savings account. You might also be wondering how else you can achieve your down payment savings goals. Look into down payment assistance programs, which can vary by location and income level.
The last thing you want is to find a house that you want, only for it to be outside of your budget. Getting pre-approved is an important step, so you know how much you will be able to borrow. Having that knowledge, plus an understanding of your savings or financial situation, can help you decide on your target price range for a house.
From there, the fun begins! You can browse for houses to your heart’s delight and see what’s available in your area (in your newly realized budget). This will help you understand your options and you can picture yourself in your future home.
For Customized Advice, Build a Team of Professionals
This sounds a little daunting, but basically you are finding a real estate professional that you trust (at your service!). Having someone who is familiar with the industry and can guide you through the ins and outs will take loads of stress out of the process.
If you’re ready to get the homebuying process started, let’s connect so you can begin to build your team of professionals today.