What Are The Financial Fundamentals for First-Time Homebuyers?

Calling those who are prepping to buy their first home!

Friends, if you are one of those, one of the steps you should take early on is making sure you’re financially ready for your purchase. Here are just a few of the financial fundamentals you’ll need to focus on as you set out to buy a home in 2023.

1. Start Building Your Credit Now.

You know that if there is no credit, then no house. Your credit is one element that helps determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.

So how do you make sure your credit is in the best shape possible when it’s time to buy? One of the  articles from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:

• Tracking your credit and disputing any errors that show up on your reports.
• Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
• Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.

These are just a few tips for homebuyers to consider. Ready for some more? keep reading

2. Automate Your Savings for Your House Fund

You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. As the article says:

“One of the best ways to save for anything — including a down payment —is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”

See the pattern on planning to buy a home and effectively achieve this goal? You may need a vision board to remind you or simply add these homebuying tips to your calendar or some visual aid to follow through.

3. Get Pre-Approved

As you prepare for your purchase, you’ll also need to have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.

Remember, a pre-approval letter from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings, can help you decide on your target price range for a house.

From there, you can start browsing for houses online and see what’s available in your area in that general price point. This can help you really understand your options so you can start to picture your future home.

For Customized Advice, Build a Team of Professionals To Your Service

Finally, the best way to make you’re prepared for your purchase is to connect with trusted real estate professionals like  John Wesley Brooks and The Brooks Family Of Realtors. Having expert advisors in the industry will help you make strong decisions throughout the homebuying process based on your specific goals, finances, and situation.  We as Top experienced Realtors know the North Alabama market and can guide you toward the home of your dreams.

What’s Bottom Line?

If you’re ready to get the homebuying process started,  make sure to connect with us as your local real estate advisors to begin building your team of professionals today.