Tips on Buying Your First Home
Making your first big purchase can be both exciting and empowering (and also a little scary). However, there is no other, more empowering feeling than purchasing your first home. Whether you’re moving out of your parents’ house, moving out of an apartment, moving on from living in a dorm or with roommates, or moving into your first new home with your new spouse, it can be an energizing experience.
You may be eager to take on this big step, but you still have to take it slow and be smart about it. Here are some tips on how to get started in the home-buying process for first-time homeowners.
Check Your Credit Score
Lenders base your mortgage qualifications based on a number of things including your credit score. Aim for a credit score of 720 or higher. People with numbers that high will get the lowest mortgage rates. If your score is less than 620, you may not even qualify for a mortgage.
If your score is lower than 620, you will need to raise it in order to be considered for a mortgage. So you might have to put off getting a house just yet. In order to raise your credit score, start doing the following:
- Pay off your debt instead of moving it around
- Pay your bills in full and on time
- Only apply for credit cards when you need them and don’t do it often if you get multiple rejections
- Be patient. It takes time to improve your credit rating
Also consider the fact that most delinquencies (like for a credit card or other outstanding debt) stay on your credit history for about seven years. That means that you need to wait that long in order to rebuild your credit history.
Start Saving & Stop Frivolous Spending
If you’re fresh out of college or have been living the good life (i.e. no mortgage, low rent, low responsibilities, etc.) you’re probably used to spending most of your paychecks. Well, it’s time to start saving up instead. Believe it or not, it can be quite self-esteem-building to save money. If you’re creative, you won’t even miss those luxuries that you decide to let go.
Saving this money will also help you get used to having less money (because all of your extra funds will either be going to your mortgage, going to bills, or back into savings for emergencies). Don’t worry though, it’s not as bad as it may seem right now.
Work out a budget that you can live on starting now.
Meet With People
Check out some reputable lenders and realtors. Talk with friends and family that have been doing this for years. Ask them for tips and advice. In every region are different money-saving opportunities.
When you look at houses consider…
…narrowing your priorities. What is more important? A garage? An extra bedroom? A backyard?
…looking into the neighborhood how close you are to everything.
…looking into the future. Are you going to spend the rest of your life here or just this chapter of your life?
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