Financial Fundamentals for First-Time Homebuyers
Buying your first home can be equally exciting and frustrating. If you’re a first-time homebuyer, one of the steps you should take early on is making sure you’re financially ready for your purchase. Having your financial life in order and understanding the impact of homeownership is vital to every step of your homeownership journey. This dictates everything from what type of home you’ll buy to the mortgage you’ll qualify for and maybe even where you’ll find that home.
Verify your mortgage eligibility (Nov 22nd, 2024)Here are just a few of the financial fundamentals you’ll need to focus on as you set out to 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 there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.
So how do you make sure 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:
Verify your mortgage eligibility (Nov 22nd, 2024)- Tracking your credit and disputing any errors that show up on your reports.
- Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
- 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
You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, 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 have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.
Verify your mortgage eligibility (Nov 22nd, 2024)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.
From there, you can start browsing for houses online and see what’s available in your area in that general price point. This can help you really understand your options so you can start to picture your future home.
For Customized Advice, Build a Team of Professionals
Finally, the best way to make you’re prepared for your purchase is to connect with trusted real estate professionals. Having expert advisors in the industry will help you make strong decisions throughout the homebuying 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
Buying your first home has many obstacles, but it is a rewarding and wealth-building process. Be sure to understand your finances first and learn how that impacts your home search. Then, build a team of trusted advisors that can help you understand the process, including a mortgage professional that will give you all of your options and a Realtor that can help you find a home that works for you. If you’re ready to get the homebuying process started, let’s connect so you can pre-approved and understand all of your options.
