Financial Steps to Take Before Buying Your First Home

Thank you CreditRepair.com for sponsoring this post. CreditRepair.com’s team understands that a credit score is not just a number; it’s a lifestyle.Buying a home is one of the biggest purchases you’ll ever make in your life. It’s a dream come true for many, with some being years in the making.

While the home buying process is fun and exciting, it can also be complicated at times. There are many different variables that play a role when it comes to purchasing and owning a home, so it’s important to have all of your ducks in a row when starting the process.

To ensure everything goes as expected and as smoothly as possible, there are some key financial steps to take before buying your first home. Following these steps will prepare you for the process. 

I’m not an expert and I recommend you talk with your financial advisor before making such a purchase, but I have been through the home building and buying process before and can talk from experience.

These financial steps are what helped make my dream come true, and hopefully can for you too!

Financial Steps to Take Before Buying Your First Home:

Save for a Down Payment

Generally speaking, you should aim to save for a downpayment of at least 20%. While it’s not impossible to purchase a home with less than 20% down, it may not be the best thing to do, as you may be faced with paying Private Mortgage Insurance (PMI), which ends up being an unnecessary cost tacked onto your monthly payments.

I don’t recommend paying PMI if you can wait and avoid doing so! Depending on your situation, you may be better off waiting a little longer to purchase a home so you can save for a larger down payment if you’re close to your savings goal rather than having to pay PMI. 

Determine Your Budget

Before you start looking at homes, it’s important to know your budget and stick to it!

When determining your budget, be sure to consider all expenses, not just your mortgage! A few things that come to mind that can often be forgotten are higher utility costs, maintenance costs, repairs, insurance, taxes, warranties, and the cost to furnish a home. 

Improve Your Credit

Much of the home buying process is dependent upon your credit score. As soon as the idea of buying a home comes to mind, be sure you examine your full credit report to get an idea of what range your credit score falls in. Checking your credit score often will give you time to address any potential issues and make improvements. An excellent credit score equates to a good interest rate for a loan, which will save you lots of money in the long run. If your credit score isn’t quite where it should be, you can start working on ways to improve it early before you make a large purchase such as a home. 

CreditRepair.com is a great resource for those needing to repair their credit. Their technology provides members with a personal online dashboard, a credit score tracker and analysis, creditor and bureau interactions, text and email alerts, as well as mobile apps and credit monitoring. They are a leading provider of credit report repair services in the United States and serve as a team of credit professionals who are there to educate and empower you to achieve the credit score you deserve.

Pay Off Any Debt

It’s a good idea to pay off any debt you already have before purchasing a home. This brings me back to my point about the importance of your credit score. Having a large debt-to-income ratio can hurt you. You may end up paying more than you should for a home due to previous debt and/or bad credit, which could then make it harder to pay off said debt in the future. 

Get Pre-Approved

It’s common to get pre-approved for more than your budget, but just because you’re approved for that amount doesn’t mean you have to max it out! Decide on your budget and stay firm with your decision! The perfect home for you will come along eventually!

 

Are you planning on embarking in the home buying process any time soon!? Is your credit score holding you back? Luckily your credit score is not written in stone, but it won’t fix itself! Get help from CreditRepair.com today with a free consultation and kickstart your credit repair efforts so you can be one step closer to owning your home! Click here to learn more!