As a first-time homebuyer, you may find yourself asking, “what can I do to get a great deal on my first home?” Purchasing a home is a financial decision that can potentially affect your finances for years to a whole lifetime.
To make sure you get an affordable home matching your homebuying goals, it’s best to take a few key steps to give yourself the best advantage during the home purchasing process.
A great way to prepare financially before applying for a mortgage loan is to pay off any small debts you have to increase your credit score. Paying off debt at the current moment frees up some of your finances in the future, giving you more funds to work with while lowering your debt-to-income ratio, which can earn you brownie points with lenders.
A great end goal is to pay off your balance in full each month while avoiding interest and still earning rewards and building credit.
If you intend to apply for a mortgage loan in the near future, it's best to avoid opening up new lines of credit accounts that can temporarily lower your score. If you need to open a new credit line to boost your score, then do so well in advance of applying for a mortgage.
Saving money for a home down payment may seem taxing; however, it helps to be intentional with your savings. Start by opening a dedicated bank account and direct-depositing a portion of your income into the account each week or biweekly to continually grow your home purchasing funds.
To expedite your saving process, consider placing savings into a CD account or high-yield savings account. These give the highest earnings from interest out of any other form of savings. Kindly note, these saving methods do make it more difficult for you to pull money from the account to help users refrain from withdrawing money unnecessarily.
Before purchasing a property, you’ll need to find out what is a reasonable amount to spend on a home. To accomplish this, you’ll need to consider your monthly mortgage, recurring bills, taxes, insurance, and any other expenses affecting your finances. Leave yourself room for savings, emergencies and wiggle room for fun expenses.
With the aforementioned tips, you can prepare for homeownership like a pro, and ease some tension of the homebuying process.
For over 25 years, Mike Johnson, has help Buyers and Sellers in Greater New Haven, and across the state turn their dreams into reality. TAJ REAL ESTATE, LLC is a full service firm specializing in Short Sale, First Time Home Buyers, Sale and marketing of existing Home and Condos, Rentals, FHA 203K Sale and Renovation of Distress Properties, and Investor Purchase.
Mike Johnson is a graduate of Fairfield University, and a resident of Connecticut for over 38 years. He served on the Board of Directors for Hill Health Corporation from 1976 to 1984, has served on the Professional Standard Committee of the Greater New Haven Board of Realtors for over 8 years, served as Board of Directors for that organization from 2009-2012, and on the Farmington Canal Committee for over 10 years.
Mike possesses a high degree of knowledge, experience and integrity, and strives for excellence, as such creating a reputation second to none. Whether your Home is under water (owing more than the mortgage balance), or behind on your mortgage and facing foreclosure, your solution is only a phone call away. Pick up the phone and put your troubles in the hands of a experienced Realtor.
