So, you’re considering purchasing a home, but not quite sure where to begin. The first steps are preparing yourself financially so that you are ready to begin the lending process and then the exciting part of finding your ‘perfect’ first-home! Below are some helpful tips to help you begin to prepare.

1. Start Saving Early

Getting a mortgage requires you to put skin in the game by making a down payment on your home. That’s typically from 3% of the purchase price to 10-20%, depending on the loan. (VA loans are as little as 0 % down!)

Start saving by slashing expenses and creating a budget to help you reach your goal. You also could ask family members if they can help out. If money is an issue, check out loans with small down payments such as FHA and VA loans to find options that fit your situation. Additionally, some government programs help first-time buyers with down payments. I can help educate you on government loans and grants that you may be eligible for!

2. Start Working on Your Credit Score as Soon as Possible

Your credit score plays a role in getting a mortgage. Almost everyone has room for improvement. Start by paying off or paying down credit cards: the higher your available credit and the lower your utilization, the higher your score. Three to six months before you reach out to a lender, review your credit reports from all three major agencies: Equifax, Experian and TransUnion. Each will show different credit history items. You’re entitled to an annual free report from each agency, available from AnnualCreditReport.com. Look for errors such as old debts you’ve paid off or items that aren’t yours. Take steps to dispute errors, and follow up to make sure they’ve been corrected. Challenges to reports take time to resolve.

If you need to build credit, or need tips, I’m happy to refer you to a trusted lending partner who can expertly guide you in building and readying your credit for homeownership!

3. Try Not to Finance Anything New Before Buying a Home

How much you owe will affect how much you can borrow. Financing a large new purchase before you get a mortgage (a new car, for example) reduces your loanable amount. You also may negatively impact your credit score with a large purchase, since you’re increasing utilization and lowering your available credit. That could have a bearing on home loan terms, such as interest rate. It’s best to stay away from other major purchases when you’re about to make the biggest purchase of your life.

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All in all, the first best step for preparing for homeownership is connecting with a real estate professional who can help you prepare as each person’s situation is unique. As a skilled expert in first time homeownership, I’d be happy to consult with you to formulate a path to homeownership that works for YOU!

Click Here to schedule your first time buyer consultation today!