Financial Fundamentals for First-Time Homebuyers

Abstract

Are you prepping to buy your first home? If so, one of the steps you should take early on is making sure you're financially ready for your purchase. Build Your Credit Your credit is one element that helps determine which home loan you'll qualify for. So how do you make sure your credit is in the best shape possible when it's time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include: Automate Your Savings for Your House Fund You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. As the article says: "One of the best ways to save for anything - including a down payment - is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you're a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine." Get Pre-Approved As you prepare for your purchase, you'll also need to have a good grasp on your budget and how much you'll be able to borrow for your home loan. Pre-approval from a lender lets you know how much money you can borrow for your home loan.