There’s a lot that goes into buying a home, let alone your very first home! From credit scores to down payments and mortgages, there are endless things to consider before making one of the biggest purchases of your life.
Use these tips to help you start moving forward on the path towards buying your new home, and to help you be prepared for the steps that it may take to get there!
1. A GOOD CREDIT SCORE
It should come as no surprise that one of the biggest aspects of buying a home is making sure you have the finances to back your big investment! Before purchasing, you have to take a look at your finances to understand exactly what you can afford. You also have to have a good credit score in order to qualify for your home mortgage! Without this, you can’t buy your new home.
Some tips for increasing your credit score: start monitoring your credit activity, and try to cut back on unnecessary credit purchases or loans prior to applying for your mortgage. For a good point of reference, it takes, on average, about 6 months to significantly increase your credit score. If you’re looking to purchase a home in the near future, get started on improving your credit NOW! This applied to anyone that may be co-financing the home with you.
2. MONEY FOR YOUR DOWN PAYMENT
Once you have your credit score intact, you also need to start saving for the down payment on your new home. Typically, down payments are between 3-20% of the overall home purchase price. Start saving now, in order to have your money ready for you when it’s time to make a down payment on your dream home!
Be careful! Many buyers make the crucial mistake of underestimating just how much money they need to have saved for closing. Don’t make this mistake! Be sure you have well over the amount you anticipate needing for your closing day. It’s better to be prepared!
3. MORTGAGE APPROVAL
Finally, Mortgage! If you have your credit in check, and your saving for your down payment, then the next step is to consider your home mortgage!
Obtaining your mortgage requires a good credit score, as mentioned, but it also requires a lot of documentation! If you’re thinking about buying a home soon, another good way to make sure you’re prepared is by getting all your documents in order. The list of documents needed for your home-buying process is exhaustive, but paystubs, W2’s, bank statements and copies of your tax returns could be some of the many documents required to verify your finances before qualifying for your mortgage!
Added bonus: It’s always best to be prepared and have all your documentation in line – but another pro of having your documents ready to go is to show sellers that you’re serious! Having your mortgage pre-approved is a great sign for buyers, and will ensure you don’t lose your dream home to another bidder who was more prepared than you!
Ready to make the move? These are just a few basic things to consider if you’re embarking on your first home-buying experience. Reach out to our specialists at Neu Real Estate Group to get all your home buying questions answered, and to receive specialized care for your specific home-buying journey. We’d love to make this process as effortless as possible for you, so you can get to starting your life, building your family, and decorating your new home!