Buying a home is a big step – for some of us, it’s the biggest financial decision we’ll make in our lives, so it can be discouraging if you are ready to for it, but some things are standing in your way.
You want your home buying journey to be a positive one, not a negative experience, and so it is crucial to make sure that you’re fully ready for it when the right time comes. Here are a couple of things you should do to get ready to buy a home.
Clear your debts.
One of the vital things you need to do is to start paying down your debt, especially your credit card debt. Doing so will help improve your credit score. Your credit score affects how much you’ll be qualified to borrow when applying for a mortgage.
This may seem like a redundant step, but removing your debt frees yourself from the stress of paying other things when you buy a house, plus it can make everything easier. If you’re planning on buying a home, it’ll be more beneficial to pay your debt rather than settle it, which won’t show up on your credit report.
Work on your credit.
It is crucial to clean up your credit report before even thinking of applying for a mortgage. Start this by pulling both a copy of your credit report and your credit score to assess where you stand. Higher credit score means that you can qualify for lower mortgage rates. Make sure to pay your debts that are past due. Next, work on paying your creditors religiously as soon as possible. This will boost your score.
Get a good home loan plan.
One of the best home loan options for first-time home buyers is a fixed rate home loan. As the name suggests, you will pay a set amount every month that won’t change despite what happens in the housing market.
Save up a down payment.
Saving up a big down payment (15-20% of the home cost) will help you prove to yourself that you’re finally ready to purchase a home. It will also help you prepare for other costs that come with the home purchase. A large down payment will make homes that may seem out of reach for you become affordable because you are putting so much down for the purchase. Take your time and save up your down payment as well as the extra money you will need for closing costs on the mortgage.
You can learn more about fixed rate home loans by visiting home loan home page of lenders. The 3 year fixed rate right now from Newcastle Permanent, for instance, offers 3.94 % P.A. fixed for 3 years. However, fixed Rate home loans let you lock in your interest rate for up to 10 years, giving you the certainty of knowing what your repayments will be.
The Bottom Line
So, what’s keeping you from buying your first home? Remember, you can always procrastinate, but that home ownership won’t come anytime soon if you do. If you have solid finances, a clear goal in mind, then you’re well on your way to being a homeowner.