Getting Ready To Buy? Start Preparing!
PREPARE FOR PURCHASE
Buying a home is one of the most significant financial investments you’ll make in your lifetime. The goal of every home buyer is to purchase the best home at an affordable price with the most favorable mortgage. Ultimately, the more you do to prepare yourself, the easier it will be to achieve these goals.
Buying a home is a big step that requires some preparation. Here are four tips to help you get started –
- Watch Your Spending – Don’t buy a new car, make large purchases on your credit cards, or apply for new credit cards in the months before you plan to buy a new home. Doing so can lower your credit score and increase the interest rate lenders are likely to charge you on your mortgage.
- Improve Your Credit Scores – If you don’t plan to buy for at least six months, you may be able to improve your credit scores and get a better interest rate. Pay your bills on time and eliminate outstanding credit card debt. But don’t close unused cards unless they carry an annual fee.
- Save For Larger Down Payment – If your anticipated down payment is less than 20 percent, you’ll get a higher interest rate and have to pay for mortgage insurance. Even going from a 10 percent down payment to a 15 percent down payment can save you a substantial amount of money.
- Organize Your Documents – Finally, begin to collect and organize the documents you’ll need to verify your finances on the mortgage application: paystubs, W-2’s, bank statements and, if you have self-employment income, copies of your last two tax returns.
By minimizing spending, improving your credit score, saving up for a larger down payment, and organizing your financial documents, you’ll be prepared to act quickly to land the home of your dreams.
