Tips on How to Become a Homeowner
Five essential steps to buying a new home
Thinking about purchasing a home? Use these tips to get your finances in order before you start house hunting.
1. Know and understand your credit score.
A lot goes into determining your credit score. Work with a home loan advisor to analyze your assets and debts. Your interest rate may vary based on your credit score.
2. Secure a down payment.
Although there are no-down payment loans available, a good rule of thumb is to save 3% to 20% of the home price for your purchase. Discuss your options with your home loan advisor. You may even be able to receive a monetary gift from family members.
3. Gather important documents.
Obtaining a loan means completing lots of paperwork. Today’s loan application process can be done online, where available, by pulling in data from your financial institutions. Having your electronic paystubs, bank statements and W-2 tax forms readily available can make the loan application process much faster and easier. Other documents will be needed along the way.
4. Get a loan pre-approval.
Work with a home loan advisor to get pre-approved. This lets you know what kind of home you can afford. It also lets sellers know you are a serious buyer.
5. Find your dream home.
Start shopping for your dream home. The location of your home is important. Consider your commute time, access to restaurants, parks, and schools. Your cost of living could increase or decrease based on where you choose to live.