Buying a home is a big life event. It is a very exciting time. I remember when my husband and I bought our first home, it was very exciting and I couldn’t wait for our new journey as home owners to start. There is also a lot to think about and learn about when it comes to getting your home loan. So I have put together some Tips for Being Prepared Financially To Buy Your First Home.
Find Out What you Can Afford- Before you start looking for a home, you will need to know what you will be able to afford. You will want to look for homes that are 2.5 times your annual salary. You will want to keep your monthly house payment to under 28 percent of your gross monthly income. You can easily figure out what you can afford by using an online mortgage calculator.
Take Your Lifestyle into Account- Do you like to spend money each month on eating out? Traveling? Make sure you take this into account when you are figuring out the monthly house payment you can afford. That way you can continue to live the way you enjoy instead of having to stop enjoying those things in order to pay your house payment.
Have a Reserve- It is a good idea to make sure you have 2 months of payments in your savings account after you close on your home. That way if you fall on hard times financially, you will have enough to pay your house payment for 2 months while you get back on your feet.
Don’t Buy Any Other Big Ticket Items- While it might be tempting to go get that new car, don’t do it. Using your credit for any purchases will change and possibly hinder your chances for getting a home loan. Refrain from these types of big purchases that will be on your credit. The same goes for not getting any new credit cards.
Good Financial History- When you apply for a home loan the lender will not only be looking at your credit score, but also your income, job history, assets, total debt, and what you will be putting down as a down payment. Make sure that your financial history will look good to your lender so you can qualify for a home loan.
Monitor Your Credit- You will want to make sure your credit score is high enough to qualify for the loan you will be getting. If your credit is too low, find out what you can do to help get it up. One thing you can do is pay down any credit cards to less than 50% use and keep them below that.
Calculating Your Down Payment- Your down payment will be a percentage of the purchase price of your home. Make sure you are calculating the correct percentage that will be needed for the loan program you will be using to purchase your home.
Don’t Forget Closing Costs- Your costs for closing on your home can vary by lender, so be sure to take those into account so you stay in your price range. This is an added cost that often times home buyers don’t realize is there.
Understand Your Options- There are many different options when it comes to a home mortgage loan. Make sure you take the time to understand what is available to you and the different options you have.
Use Online Resources To Help You- The Capital One Home Loans Online Neighborhood is a free online resource where you can learn all about home buying. We’ve gathered easy-to-understand articles and helpful videos, as well as information about Capital One’s Home Loans offerings.
“Capital One’s goal is help first-time homebuyers understand how the home loan process works, which is why we’ve launched a new online learning center that features the know-how they’ll need to become the savviest homeowners on the block.
If you’re interested in learning more about Capital One Home Loans and how we can help you get home, visit https://www.capitalone.com/home-loans/direct/learning-center or call us at 855-900-8886.”
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.