Buying a Home for the First Time?Laura is here to help
What You Need to Do before Buying a First Home
Before diving immediately into the home buying process, it’s important that you make the necessary preparations so that your home buying experience will be a blessing and not a curse. If you’re looking to purchase a new home, make sure you do the following to get ready:
- Check and Improve Your Credit Standing – You’ll need a good credit score if you’re applying for a mortgage. So, take this time to inspect credit reports for errors and dispute any inaccuracies with the credit reporting agency. If you need to improve your credit score, begin by paying your credit card balances and avoid applying for new credit, such as a new car loan or credit card, until you’ve closed your new house.
- Begin Saving for a Down Payment – On top of building credit, you should save enough money to pay 20 percent down payment. Paying at least 20 percent of the home price will help you obtain the best mortgage terms. Additionally, that amount saves you from paying Private Mortgage Insurance (PMI).
- Gather Your Financial Documents – If you’re applying for a mortgage, you need to submit enough documentation to prove you can pay back a large loan. Some of the documents you’ll need include bank statements in the last few months, W2 statements from the past two years, and recent pay stubs.