Are you prepping to buy your first home? If so, one of the steps you should take early on is to ensure you’re financially ready for your purchase. Here are a few financial fundamentals you’ll need to focus on as you buy a home.
Build Your Credit
Your credit is one element that helps determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While many factors go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.
So how do you ensure your credit is in the best shape possible when it’s time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:
- You are tracking your credit and disputing any errors on your reports.
- You are paying your bills on time. This includes making loan payments and paying down any open lines of credit.
- Keeping your credit card balances low. Spending more than your minimum monthly balance when you’re able can help.
Automate Your Savings for Your House Fund
You might also wonder how to achieve your down payment savings goals. Bankrate provides buyers with several tips to help them save, including searching for down payment assistance programs and ways to save faster. As the article says:
“One of the best ways to save for anything — including a down payment — is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”
Get Pre-Approved
As you prepare for your purchase, you’ll also need to grasp your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.
Pre-approval from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings can help you decide on your target price range for a house.
You can start browsing for houses online and see what’s available in your area at that general price point. This can help you understand your options so you can begin to picture your future home.
For Customized Advice, Build a Team of Professionals
Finally, connecting with trusted real estate professionals is the best way to prepare you for your purchase. Having expert advisors in the industry will help you make healthy decisions throughout the home buying process based on your specific goals, finances, and situation. They know the market and can guide you toward the home of your dreams.
Bottom Line
If you’re ready to get the homebuying process started, let’s connect so you can begin to build your team of professionals today.