If this is your year to buy a new home, but you’re not sure how to get started, don’t worry. The path to homeownership can actually be enjoyable and rewarding. Here are a few tips to help lay the foundation.
Check Your Credit Score
Many Americans don’t know their credit score—do you know yours? Understanding your credit score can help you better understand the role it plays for the rest of your financial life. And, if you’re in the market to buy a home, that means knowing the interest rate for which you may qualify. Checking your score will allow you to identify red flags—like a low score or credit accounts that you’re not aware of—so that you can work to address those issues before you apply for a mortgage.
Understand Your Finances
Beyond understanding your credit score, you’ll also want to document your income, liabilities and assets as these are key to helping your lender determine what you can afford.
- Income: What you’re earning
- Liabilities: Debts you owe and financial obligations
- Assets: Property you own
Understanding your spending habits is another key part of painting an accurate picture of your finances. Do you know if you have enough saved up for a down payment or closing costs? If your spending habits are preventing you from getting there, you’ll want to adjust where you can so you can set money aside to cover these costs. Keep in mind, though, that not every home loan requires a down payment. Talk to your lender about your options. You’ll want to make sure you’re choosing the mortgage that best fits your current and long-term budget.
Work With Trusted Partners
Trust is an important thing. When you’re looking to buy your first home, you’ll feel more comfortable if you can work with people you trust. You’ll want to make sure your mortgage lender and your real estate agent pass your “gut check.” For example, if you’re looking to settle down after a military career, you may feel more comfortable working with a lender and real estate agent who are more experienced in helping Active Duty military, veterans and their families. Your financial institution may even have a program to help place you with an experienced real estate agent that fits your needs, like RealtyPlus® through Navy Federal.
Becoming a homeowner is one of life’s major milestones. Planning ahead using the tips mentioned here, along with working with the right professionals, can help simplify and streamline the process.