Before purchasing your first home, you’ll want to focus on a few very important steps of the home buying process. After stabilizing your credit, determining what you can afford, and researching all costs, you’ll be ready to get into the more exciting aspects of choosing your first home.
Stabilize Your Credit
Your credit score is going to either negatively or positively influence which houses you are able to buy. Get your credit report as soon as possible and start making changes to improve it. In order to make the most of your credit score, avoid moving your money around in drastic ways for a few months before you plan on applying.
Don’t apply for new credit cards. Don’t take out new loans.
Banks and lenders are looking for consistency. This clues them in that you are reliable and a satisfactory candidate for a mortgage. Providing them a complete trail of where your money has been for the recent past can only help your credibility as a mortgage applicant.
Determine Your Budget
In all likeliness, a home will be the biggest purchase you ever make. Many people get into trouble when they try to buy too much house when they cannot afford it. It can leave you with less money for other financial goals you may have such as buying a new car or paying for college. Avoid this by maximizing your monthly mortgage payment at 28% of your monthly income. For example, if you are making $1,000 per month, you should only be spending $280 per month on your mortgage. Staying within this budget will free up your leftover income for things like paying other bills, taking vacations, and buying new cars.
Be Aware of Sleeper Costs
Naturally, the most important number to pay attention to is your monthly mortgage payment. However, you also shouldn’t minimize the importance of extraneous costs such as taxes, maintenance, and repairs.
Costs like taxes, routine maintenance, and unexpected repairs arise all the time, be sure to purchase a home that you can maintain.
Smith & Co. Auction delivers hundreds of live auctions every year to Northwest Oklahoma, selling everything from residential real estate to industrial equipment. If you are interested in purchasing a home or other property, check out our list of upcoming auctions to stay up-to-date on our forthcoming listings.
