Everyone talks about preparing financially to purchase and own a home. However, it’s not always exactly clear how to prepare. Rather than get overwhelmed by details, there are some basic things you can start with in order to get your finances ready for home ownership. Here we will go over the best ways to prepare.
Unfortunately, there is no quick cure for a low credit score. It’s based on a lot of long-term factors like bill payment history and age of your credit accounts, so it’s difficult to boost your score short term. However, the more you prepare for buying a home, the better—and creating and maintaining good credit habits will help you in the long run. The first thing you can do is sign up for a free credit monitoring service so you are aware of your starting point. You can also identify any errors that might count against you so that you can dispute them. Some other things you can do are:
Hold off on opening any new credit cards or loans to avoid “hard inquiries” on your credit
Set up auto-payment with any recurring bills to avoid late payments
Don’t completely close any old accounts, even if you don’t use them anymore
These are just the basics and while they are general best practices, only consider them in your own credit situation. For detailed financial advice, always consult a professional.
The down payment on a new home is the largest upfront expense to prepare for. The size of the down payment will depend on the terms of the mortgage you choose, as well as the purchase price of the home. However, most experts recommend aiming for 20% of the price on the home. While the amount you need in the end might be lower, consider the advantages of saving more than not enough. Some simple strategies for saving up for this expense include automatic deposits into savings and redirecting funds you would normally contribute to a retirement fund. Everybody is different, and it’s important to consider the details of your particular financial situation. Hiring a financial advisor who can create a customized savings plan is a great idea for getting the most savings possible.
Among the myriad loan options available for homebuyers, there are some programs that exist specifically to help first-time homebuyers. There are various forms of financial assistance available, including special mortgages with low interest rates or tax credits. You can usually find these types of programs available through state governments. Take some time to research whether your state offers any financial help in buying your first home — it might surprise you how many opportunities are available.
The financial aspect of buying your first home is complicated and so is saving for it. However, if you follow these general best practices, you’ll be creating a solid foundation for yourself and your financial future.
Shana Lundell has been a real estate professional since 2003 in Bourne, Cape Cod, Plymouth and the surrounding areas, where she’s lived since 2000. Shana is a luxury and waterfront specialist who has represented hundreds of buyers and sellers, including representing builders in over 100 new construction transactions in her career. She consistently achieves recognition awards for top production, including membership in the Coldwell Banker® International President’s Elite, an honor reserved for the Top 3% of agents globally. Shana ranks in the Top 100 of 4,000 Coldwell Banker agents in New England.
Shana works with a range of clients, including lifestyle properties, vacation residences, down-sizers, trade-up buyers, land, first-time home buyers, and new construction sales. She understands that moving happens for a myriad of reasons and has had the honor of helping all types of transactions. Many emotions can come into play during this time, but Shana is skilled at keeping calm and carrying on with care, professionalism, open communication, and the ability to keep things on target to achieve results. She guides her clients smoothly through the process, from dynamic marketing measures, negotiation and solution strategies, connecting pivotal professional resources, to coordinating the essential closing details.
Shana is proud to have over 100 five-star client testimonials that rave about her positive, professional, responsive, and authentic approach to real estate service. Love where you live. Live where you love. Looking to buy or sell? Call Shana Lundell!
