You can reduce the stress of home buying by thinking ahead. Before you find a home you want to purchase, develop a financial plan. This plan becomes your guide not only for saving money for the down payment, but also for covering other expenses such as your credit check, mortgage application and closing costs. For more details about what to expect financially, ask your Russell Realty Realtor®.
Having an established credit history plays an important role in the home buying process. It's never too soon to start building a good credit history. Start by diversifying how you pay for things; don't pay for everything with cash. Pay your bills on time, limit your debt, reduce the number of credit cards you have, and use them responsibly. Your goal is to show that you are financially responsible and a "good credit risk."
It's also important to review your credit report. This is a record of past and current debt that states when, how and if you paid. Make sure that the information contained in your credit report is accurate. By reviewing your credit report now, you'll have the opportunity to correct any errors. Your Russell Realty Realtor® can help you get a copy of your credit report to review. Don't wait until you've found a home to do this. Do it now.
Why is this so important? Your credit history is one of the documents that give the mortgage lender confidence in you. The better your credit history, the better your credit score. And the higher your credit score, the more likely your mortgage lender will offer you more mortgage options with better terms.
You're smart to think ahead. The best approach to buying a home with few financial surprises is to learn how homes are financed, find out how and where to get financial assistance, and understand all the costs involved in addition to the cost of the house. What follows is a brief explanation of (1) Mortgage Pre-approval, (2) Down Payment, (3) Mortgage Options, and (4) Closing Costs.
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