Owning a home is a dream for many Americans, but make sure you are prepared and financially ready to make the move. Here are some fundamentals to focus on as you begin the home buying process.
Build Your Credit
Your credit is vital in determining which home loan you can get from a lender.
It also impacts your mortgage interest rates. A higher credit score could lead to a lower monthly payment in the long run.
A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:
Tracking your credit and disputing any errors that show up on your reports.
Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.
Automate Your Savings for Your House Fund
In order to maximize your down payment savings goals, Bankrate provides a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. According to the article says:
“One of the best ways to save for anything — including a down payment —is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”
Get Pre-Approved
Preparing for a home purchase also means getting ahold of your budget and finding out how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.
Pre-approval from a lender lets you know how much money you can borrow for your home loan. That information will help you decide on your target price range for a house.
From there, you can start browsing for houses online and find a realtor who can help you find homes that meet your criteria and price point.
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