4 things to do before buying a home

If you’d like to purchase your own home, be intentional and set a goal of saving and paying off debt.

1) HOUSE FUND

First, make your dream a reality by setting up a separate “house fund” so you can put aside money for a down payment. Set a specific goal of saving a certain amount. Say you want to purchase a house for $200,000, set a goal of saving 10% or $10,000. Divide it by the number of months you’d like to save and you’ll know how much to strive to put ito savings. You could save $10,000 in a year by saving $833.33 each month or it will take two years if you save $416.66 per month. You may need to get a part-time job to do this or just cutting back on extras may do it, such as eliminating daily lattes, eating out, or finding other ways to cut your budget like eliminating cable or planning meals for the week. Commit and don’t be tempted to spend the money on something else.

2) PAY DEBT

Next write down the totals of all of your debt (credit cards, student loans, car payments, etc.) Use Dave Ramsey’s strategy to pay off debt by using the snow ball effect. You pay off the smallest balances first. Then when you pay off the smaller balances, add the amount you would have paid on those credit cards onto the larger balances. Your debit will diminish once your payments aren’t so spread out.

3) GET A REALTOR

The next step is to call a realtor who you know and trust. Zillow and Realtor.com are not trustworthy websites in which to find a home. They provide computerized estimates of homes throughout the country from California. They don’t take into account the features of your home like a real agent does. They also advertise homes that have been sold or are not available. Their motive is to get you to call them so they can give your call to a realtor who pays their site. If you don’t know a realtor, ask friends and family who they would recommend. Knowing your realtor is beneficial because they care about making you happy and having a positive experience because you will see them again and possibly recommend them to family and friends. Before showing you homes, a good realtor will recommend you to a mortgage person to get preapproved.

4) CREDIT

Finally, talk to a mortgage person. A good mortgage person will run your credit, provide you with and explain your credit score, and give you strategies to increase your credit. Credit matters! The better your credit score, the better interest rate you will receive. Also, if you don’t have 20% to put down on a home, mortgage insurance will be added. The better your credit score, the less mortgage insurance you will pay monthly. This can add up to paying hundreds extra per month to your house payment.

CONTACT US

Call, email, or text us to take a step to purchasing your own home. We would love to assist you in getting ready to buy a home. We have great mortgage contacts with programs that assist with down payments.

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