Buying a home for the first time can be a huge undertaking – especially if you aren’t prepared. There can be a lot involved in buying a home. Before you take any action toward a purchase, such as making an offer on a home that you have found, make sure you complete these steps.
1. Know Your Credit Score
Before you do anything else, check your credit score and, if needed, work on making it better. The higher your score, the better interest rate you can get on your mortgage. It can take some time to improve your credit score so you want to do this as soon as you decide you want to purchase a home. There are many ways you can improve your score, and it is based on your personal situation. There are online resources that will provide your credit score for free once a year along with tips for improvement – or your financial institution can give you this information as well.
2. Save for Your Down Payment
Most mortgage loans require a down payment, and the size of your down payment (such as 20 percent) can help reduce other expenses associated with your loan. Start saving for your down payment now so you can afford the home that you want when the time comes. If you start early and plan ahead by saving a little per month – it will add up! If you do get a mortgage loan that does not require much of a down payment, you should still try to save as much as possible for closing costs.
3. Do Your Homework
Do you know the definition of “first-time home buyer?” You may be surprised to find out that this term can apply to people who have previously bought a house! If you have bought a home in the past, you may qualify as a first-time home buyer based on the amount of time (such as three-five years) since you bought your last home. Also, there are programs and resources available in Georgia for which you (or the property you are interested in purchasing) may qualify.
4. Get Pre-Approved
Before seriously looking for your first home, it’s important to know your spending limits — in other words, how much you are approved for by your mortgage company. It does not usually take long to do this important step, and it will make the process faster (and less stressful) when you do find your dream home.
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