So, you’re tired of paying rent and thinking about buying your first home. The path to homeownership can be very exciting… but with all of the paperwork and jargon, it can also be stressful!
You want to begin your home buying journey with confidence, and to do so we recommend checking out these below tips.
Check your credit
A good credit score is essential to buying a home. It proves that you have a good track record of paying off past debts and shows lenders that you are a trustworthy borrower. A higher credit score will also save you money by making it easier to qualify for a lower interest rate.
Request a copy of your credit report from all three credit reporting bureaus: TransUnion, Equifax and Experian. You will want plenty of time to dispute any mistakes, so be sure to do this way in advance.
Before you start heading to those open houses, you first need to figure out how much home you can afford. The best way to do that is to get pre-qualified.
A mortgage pre-qualification is a statement from a lender showing how much money you may be able to qualify to borrow. The lender will evaluate your financial history, looking at your income and reviewing your credit report, in order to give you a high-level overview of your buying power.
By getting pre-qualified, you will know that you are shopping within your means and showing lenders that you are a serious buyer.
Save Save Save!
You will need to save between 3 to 20 percent of the house price for the down payment. And don’t forget, you’ll have to save a little extra to cover closing costs.
However, building up your savings account isn’t just important when buying a home. Lenders want to know that you are not living paycheck to paycheck and will look at your Debt-to-Income ratio to determine if you are a trustworthy borrower.
A good rule of thumb is to always have three to five months’ worth of mortgage payments set aside. This emergency fund will come in handy if something drastic happens with your job, or even just for maintenance around the home. You should expect to spend 2.5 to 3 percent of your home’s value each year on upkeep and repairs.
Meet Your Loan Officer
You’ll likely have many questions when it comes time to purchase a home and having an experienced Loan Officer assisting you will make the process as smooth as possible. Reach out to an Eagle Home Mortgage Loan Officer and begin your journey to homeownership today!
Ready to get started?
By Meagan Rochard