Are you hoping to finally make that leap in becoming a homeowner…but you recognize that the MAIN component of that dream is financially rooted. Examining one’s finances can be overwhelming and anxiety inducing but there are some reasonable recommendations we’ve researched that might make your dream appear that much closer. So please, take a moment and see if any/all of these suggestions might make tough things a little bit easier.
- CREATE A BUDGET: It’s sounds sooooo tedious and like a task that easy to procrastinate, but most of us underestimate the true nature of our disposable cash. While we think we have a handle on what we spend, we often ballpark and the sooner you have some exactitude in this matter the sooner you can take steps needed to SAVE! Yes, the goal is to break down all your expenditures in categories and get a real sense of where you can cut back in spending.
2. SAVE, SAVE & SAVE SOME MORE! The reality is that saving for a down payment is the initial critical goal you are targeting when looking to buy a home. The truth of the matter is that closing on a house involves more cash than you probably initially think, so having a cash stash is critical. There are additional closing expenses and moving expenses and other unforeseen costs that pop up along this winding path. You also don’t know what kind of immediate repairs you might need to make upon moving into the house (concessions aside). So, review that budget and focus on being empowered by the sacrifice of saving knowing that it’s getting you that much closer to homeownership!!!
3. ESTABLISH A CLEAR GOAL Although budgeting and savings is half of the battle the other half is knowing the amount you’re saving for. Having a specific number in mind is critical to attaining your goal. Akin to losing a job, you need to know how much you exactly need to save PLUS additional expenditures. After identifying a home you like, figure out what your mortgage payment would be and factor that into the down payment plus expenditures. These specific numbers will help you feel more in control of your destiny. The money will be there for you and you can begin your pursuit.
4. GET YOUR CREDIT SCORE! Mortgage approvals are based on good credit scores, it’s just the nature of the game. So, feel free to saunter over to Experian, TransUnion or Equifax to get your once a year free credit score. Once you know this you can be empowered to change it. If it’s great – congrats you should sail through the mortgage process. However, it you’re like most Americans and have an average credit score of 679 (out of 850), see if there are ways to increase it like paying bills on time. Whatever the scenario the more you know the better off you’ll be when applying for that mortgage.
5. PAY DOWN DEBT! A win-win situation in the homeownership game. The more that you pay down your debt the more rewards you’ll run into. Yes, it’s a hard task but the rewards are great. (1) An obvious win is that the less debt you have the greater your credit score