3 Ways To Prepare for Your First Home
Some tips to help you not lose your hair during the home-buying process...
We all know that purchasing a home is one of the largest purchases in our lives. So, how do we do it in a way that is smart and overall makes sense for our finances? Check out these three tips below that will save you some hassle while you prepare to buy your first home.
1. Know Your Budget
Before ever looking at homes, contact a Mortgage Lender and sit down with them to determine your budget. Mortgage Lenders can help you understand the monthly percentage of your income that needs to go towards housing. You don't want to be "house-poor" and a lender can help you determine a price range that suits your budget. Once you do this step, you can begin looking at homes in your price range. If you've already reached out to a Realtor, ask them for a Lender recommendation. Usually Realtor's will have a list of reputable lenders in the area that can help you save time on searching for someone.
Side Note: The lender make recommend that you save up 20% of the purchase price for a down-payment. While there are a lot of down-payment assistance programs, it is always helpful to save as much as possible specifically for the down payment.
2. Build Your Credit
This one is kind of a given. Anytime you are going to be taking out a loan for something, you need to have some decent credit built up. Ideally, lenders like to see a credit score of anywhere around 700-800. However, just simply start somewhere. If you don't have a lot of credit, try applying for a small limit credit card. Use this card to purchase gas or groceries every month and pay it off immediately. This is a quick way to build up credit. Other things that help build up credit are, (some) rent payments, car-payments, and student loan payments. If you have a bad credit history and are stuck on what to do next, try contacting a reputable financial advisor in your area.
3. Get a Home Inspection/Plan for the Unexpected
Okay, so this is kind of two tips in one, but they go hand in hand. Before you start searching for a home, try saving up a little money for renovations. Unless you are moving into a move-in ready home, most likely you will want to make some changes while, or before, you move in. To make sure that these renovations are only cosmetic and not structural, be sure to get a home inspection once you decide to put in an offer on a property. Home inspections are expensive, but it is more expensive to be stuck with a "money-pit" property after signing the papers.
Thank you for checking out the article! Feel free to reach out to me personally if you'd like to hear about my personal journey of finding my first home.