When Preparing to Purchase a Home the First Step is getting your finances and credit in order. Mortgage Lenders Review you Credit History, Employment Status, Income and Debt to qualify you for a
Tips For Home Buyers Looking To Purchase A Home In 1 To 2 Years
1. Sign Up for a site that allows you to monitor your credit scores, credit reports and dispute any inaccuracies.
Here's one that I use Score Sense, there's a monthly fee involved, but there are other free sites like Credit Karma that you can use as well, but keep in mind they use Vantage Scores which could vary from your FICO Score. These sites are still a great resource to know where you stand, see your credit report and provide helpful tips you can do to make improvements.
2. Lenders will be looking to make sure you have stable income and employment history. Most require at least 2 years, self-employed 2 years tax returns showing reported income.
3. Lenders will review your debt to income ratio to determine how much home you can afford, so pay down any debt that you May have and don't take on any unnecessary new debt.
4. Save for your Down Payment & Closing Costs. A good Rule of thumb is to have 6% of the Total Sales Price of your Budgeted Home. You can tap into resources like 401K, IRA Account, or Tax Refunds to Help with Funding Costs. If you can't save that much or don't have those type of resources available there are Home Buyer Programs but keep in mind most only cover your Down Payment and you will still need some available funds to close. These programs also have credit, income and other requirements that must be met to qualify.
5. Determine the areas you want to live and your Budget.
6. It's never too Early to partner with a Realtor who can be a great resource on giving you helpful tips to get prepared for home ownership.
I purchased my first home as a single mother in my early 20's, so I know the fears, the anxiety and the financial responsibility that comes with such a large purchase. But I also know the pride, joy a....