I. CREDIT

Your credit score can impact your interest rate. This consequently effects your purchasing power. Work on bringing your credit score up and this will help you to secure more favorable items.

II. BUDGETING

You’ll need to save between 3.5% and 20% of the house price for a down payment. The amount needed will depend upon the loan type that you choose.

III. SAVING

Along with budgeting comes saving. Building up your savings for a home is very important. Your lender wants to know that you are not living paycheck to paycheck. If you have 3 to 5 months’ worth of reserves or mortgage payments set aside, you are a much better loan candidate for a mortgage. That money will also help pay for maintenance and repairs for your new home. Most repairs are sporadic, but expensive for example, water heaters, new roofs, etc. A good rule of thumb is to assume that you will spend 2.5-3% of your home’s value each year on upkeep and repairs.

IV. GET PRE-APPROVED

Before you start house shopping, you should get pre-approved for a mortgage. Your realtor can connect you with a trusted mortgage partner to obtain a pre-approval.

V. BUY YOUR HOME

Finally, after all of your hard work with preparing your credit score, budgeting, saving, and getting pre-approved you are prepared to purchase your new home. According to the National Association of Realtors, a survey revealed that the average homeowner lives in their home an average of 10 years. Purchase a home that takes into account more than just your immediate needs.