Check Your Credit Score: Obtain your credit report and ensure it's accurate. Aim for a score of 620 or higher for better mortgage rates.
Reduce Debt: Pay down high-interest debt to improve your debt-to-income ratio, which is crucial for mortgage approval.
Save for a Down Payment: Aim to save 20% of the home's price to avoid private mortgage insurance (PMI). Smaller down payments are possible but may require PMI. VA Loans have a zero down payment and FHA loans are 3%. Save as much as you can! (See my homebuyer grant post.)
Calculate Your Budget: Determine how much you can afford by considering your income, debts, and monthly expenses. Use online calculators to estimate affordability.
Build an Emergency Fund: Save at least 3-6 months' worth of living expenses to cover unexpected costs.
Gather Financial Documents: Prepare documents like tax returns, pay stubs, bank statements, and proof of assets to streamline the mortgage application process.
Get Pre-Approved for a Mortgage: Shop around for lenders, compare rates, and get pre-approved to know how much you can borrow before you start shopping.
Avoid Major Financial Changes: Refrain from making large purchases or job changes during the home-buying process to maintain financial stability.
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