Many people get home buying fever, and decide it’s time to buy their first home. They get excited at the prospect of owning a home, and contact a realtor. Then it’s time to house hunt, looking for that perfect home. Suddenly, the perfect home is coming into view, but because of problems, like a poor credit score, a home loan can’t be secured, and the home is sold to someone else.
Don’t let this be you. Do your homework, and you will improve your chances of buying a home. Clean up your credit score, attend a first time buyers seminar, and practice home ownership before you take the plunge. If you do, you’ll find the home buying process is much easier.
First, your credit score needs checked out, and improved if necessary. Everyone who’s signing the loan paperwork needs to know both of his or her credit scores. Banks tend to lump scores into groups of 50 points, so pushing your score above the 00 or 50 mark (700, 550, etc) will help put you in that lower interest rate group. How do you raise your credit score? Make on time payments, limit your credit usage, don’t close accounts, and don’t open new ones.
First time buyer’s seminars are held all over the country. They’re aimed at, you guessed it, first time home buyers. Even if you’ve read up extensively on how to buy a home, there are a few tips and tricks you’ll learn at a seminar. And, if you don’t have a lot of knowledge, you will after attending. Most seminars are inexpensive, and worth the time spent. You can never have too much knowledge.
Last, practice home ownership before you even start looking for a house. There are many mortgage calculators on the internet, so start plugging in numbers, and figure out how much a mortgage is going to cost you each month. With a little research, you’ll know what homes in the area you want to live in will cost, so you can come up with a pretty accurate mortgage figure.
Start putting that mortgage amount in the bank every month on the same day. Don’t be late. Set up a separate savings account for it, and don’t touch the money. Once it’s in there, consider it spent. Do this for 6 months, and evaluate. Was it difficult to come up with the money each month? Did you put it into savings, and then wish you had it available for other things? Did you have to take money out for emergencies? If so, then you’re going to have trouble paying your mortgage when you buy a home. Sure, if you’re renting now you won’t have that additional cost each month, but with home ownership, things are going to pop up, so you may spend that rent amount in house repair each month.
If putting the money away wasn’t a hardship for you, then home ownership might be a good choice. You’re prepared to pay a large amount each month, and you’ve been budgeting for it. Plus, if you decide to go look for a home now, you’ll have a small chunk of change saved up towards a down payment, which will help you secure a loan faster.
It’s possible to go about buying a first home the right way, and the wrong way. By cleaning up your credit score, attending a first time buyer’s seminar, and practicing home ownership before you actually buy a home, you’ll have much better chances of successfully buying that first home you’ve always dreamed of.
What did you do to help prepare yourself to buy home?