Buying your first house is no small feat. It can take years of hard work to get yourself in the place that you need to be in order to qualify for a mortgage. If you’re unsure where to begin, now is as good a time as any to start educating yourself on how best to prepare for purchasing a home.
Get Your Credit Score Boosted
Unfortunately, this is not something that your lender can help you with, no matter how many gift baskets you send them. Your credit score generally needs to be at 650 or higher to qualify for a home loan, though exceptions apply.
If you have no idea how to figure out what your credit score is, don’t worry. There are services online that you can sign up for to help navigate you. Credit Karma is a free service that will not hurt your score if you check. It might be lower than you expected. That’s okay! Everyone has to start someplace, so that’s why you work to get your score boosted.
- Start paying off your debts and credit cards first and foremost. Pick the credit card that has the highest interest rate (store credit cards, like Target and Home Depot, are typically highest) and pay it off first.
- If you have few outstanding debts and no credit cards, now’s the time to apply for one. You want to build your credit so that you can get your score climbing. There are some cards that are better than others for beginners.
- Not all debts are bad for your credit score. Some, like student loans, can actually look really good on your report. If you are making regular payments and the debt is several years old, creditors love seeing that!
Save Your Pennies
There are some costs associated with homebuying that first-timers don’t always know about. It’s a good rule of thumb to think about saving three to five percent of the total purchase price of a home. This sounds like a difficult task (and it can be!), but it is smart to have a separate account just for your house fund. Start saving as much as you can for costs like:
- Realtor fees
- A down payment on your new home
- Closing costs
- Additional fees you might not be expecting
Congratulations on the first leg of your home buying journey! It’s a long road, and it can be hard to stay hopeful, but keep on pressing. You will thank yourself later when you go to sleep in your new master bedroom of your first home.