The first thing a first-time buyer should consider is their credit report.
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Deciding to buy your own home is a big, exciting step in life. Congratulations! But often, new buyers can be intimidated and discouraged by the complicated, often overwhelming process of buying a home for the first time. I believe the best place to start is for you to know your credit score, and to get a recent copy of your credit report.
Once you have your report, make sure all of the information in your report is accurate. Many times, new buyers discover they have blemishes on their report that are completely erroneous. It may take some time to get these mistakes removed from your report, so it’s important to start examining your credit report as soon as possible so you don’t get delayed later.
How high should your score be? Not everyone pays the same interest rate. The better your credit score, the more likely you are to receive a lower interest rate. This means that a higher credit score can directly translate into more home for your money!
A higher credit score can directly translate into more home for your money!
How high should your score be? Many believe that they need a 750-or-higher FICO score to purchase a home. The truth is that according to a recent industry publication, over 53% of home loans are approved with a FICO score under 750.
Wherever your score stands, it can’t hurt to make it higher. Here are some tips for improving your credit:
1. Make your payments on time.
2. Limit your spending to no more than 30% of your credit-card limit.
3. Consider balance transfers to free up credit.
4. Work with a credit counselor or lender to improve your score
When you feel your credit is strong enough, speak to a lender and get pre-approved for a mortgage. It’s better to see a lender before you start looking at houses. This way you will have a more clear understanding of your budget and how much you can reasonably afford.
We’ve worked with almost every lender out there. You may be surprised to find that your current financial institution may not be your best option in securing a home loan with the best rates possible. We can certainly point you in the right direction for superb, personalized service.
We are excited to help you achieve your real estate goals. If you have any questions, just give us a call or send us an email. We would be happy to help you!
