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26
Tips for Preparing for Homeownership
Realtor.com recently shared '5 Habits to Start Now if you Hope to Buy a Home in 2017.' Below are the top three from their list with a brief description.
#1 - Automate Your Down Payment Savings
One way to jump start your down payment savings is to automate your checking account to automatically save a small amount of your paycheck into a separate savings account or 'house fund'. "Amassing enough for a down payment takes discipline & perseverance, but setting up automatic savings can make it easier. If you never see the cash, you won't spend it."
#2 - Build Your Credit History & Keep It Clean
When you go to apply for a mortgage, lenders will want to see that you have been able to pay off past debts. This means staying on top of your student loans, credit cards, and car loans and paying them on time! Credit bureaus recommend using no more than 30% of the credit available to you.
#3 - Practice Living on a Budget
Downsizing your spending now will allow you to save more for your down payment & pay down other debts to improve your credit score. A study by Bank of America showed that "95% of first time buyers were willing to make sacrifices to buy their home faster." The top 3 sacrifices cited by Millennials when saving for a home are: cutting back on new clothes, a new car, and travel.
#4 - Know Your Credit Score
Knowing your credit score and getting a recent copy of your credit report is one of the first steps that you can take toward knowing how ready you are to start the home buying process.
Make sure all the information listed on your report is accurate and work to correct any mistakes. The higher your credit score, the more likely you will be to receive a better interest rate for your mortgage, which will translate into more 'home for your money.'
#5 - Show Sellers You Are Serious... Get Pre-Approved
In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.
When you're ready to buy, contact us at 866-441-1776 to be put in touch with a Ruhl&Ruhl Realtor. They will help you through the entire homebuying process - from start to finish! And if you're looking for more information on buying your first home, check out Keeping Current Matters Milennials Guide to Homebuying.
