You’ve decided that it’s time for you to purchase your first home. Now what? Being a first-time homebuyer is one of the most exciting and uncertain times of your life. We want to make sure that you’re 100% prepared for this life-changing moment so that it’s a huge blessing for you!
Improving your credit score early is one of the best things you can do for your chances of getting a wonderful home that you can afford at a low-interest rate. How? First, pay off any outstanding bills or unpaid debts. Second, pay off any revolving consumer debt (like credit cards). Finally, make paying down any student or automotive loans your number one job. Once you start doing these things, you score should improve quite a bit. Time will gradually make your score better and better.
Determine What You Can Afford
Write out your budget as it currently stands and determine what you can and are willing to pay for. Be sure to do this before you get pre-approved and stick to your guns. The bank may tell you that you can afford more than you really can, so be sure to put your foot down on excessive spending.
Save for Your Down Payment & Closing
In total, you will likely need anywhere between five and 20 percent of your purchase price for a down payment and an additional two to five percent for closing costs. Be sure to have this saved in advance so that when you find your dream home you’re ready to make an offer right away.
Build a Savings
Once your purchase you’re home, it’s important that you have cash reserves. For starters, you’ll want between three and 10 percent of your home purchase cost for home repairs at all times. Second, an emergency fund of three to six months of household expenses in a reserve account will keep you from having an emergency that will prevent you from making your mortgage payments.
It’s time! Call a lender and obtain pre-approval. www.Bankrate.com offers the lowest mortgage rates as they currently stand, but you may also want to enlist the help of a mortgage broker to find the lender who’s right for you.
To learn more about the services that Merit Real Estate has to offer, visit us online at www.MeritRealEstate.com or call 310-379-4444 today!