3 tips to make closing on your first home a breeze
Buying a first home can be both exciting and scary. That’s why it’s important to take a few steps before your purchase to minimize stress, and to make the process run as smoothly as possible.
Here’s what you can do:
Know your credit score. Your credit score is the number that banks will use to qualify you for a loan. This number is largely made up of how long you’ve had credit, how good your payment history is, and how much of your available credit you’ve used. Before applying for a loan, take the time to find out what your score is. If it’s a bit low, raise it by paying down debt and making sure payments to creditors are on time. With a higher credit score, you’ll have more mortgage options and receive better rates.
Get pre-qualified for a loan. Getting a pre-qualification letter from your bank lets sellers know that you’re serious—and it also gives you an idea of what you can afford, since the bank will base your prequalification amount on your income and debt. Use that amount to help you set your budget.
Figure out your budget. Your mortgage payment will likely be more costly than your rent was, plus there are other costs associated with owning a home. Try putting away the anticipated larger costs for a few months to make sure it won’t be too much of a stretch for you. And don’t forget to stash some money for unexpected emergencies that might come up.
Equal Housing Lender