Prepare Today To Buy A Home Tomorrow
Big tasks and huge goals are sometimes overwhelming. When you’re at the beginning of a journey it might seem inconceivable that you’ll ever be at the finish line. For instances like this, it is good to remember the old adage that the journey of a thousand miles begins with a single step. It is important to remember that you do not have to accomplish your big task overnight. In fact, it is much easier if you do not think of it as one giant task and instead think of it as a bunch of mini-tasks. Same is true of buying a house. If you have been renting all your life and you are not prepared to buy a house at this moment, you should not think of having to do everything at once. There are small steps you can make today that can prepare you to buy a house tomorrow.
Simple Plan for Home Buyers
Buying a house does not happen all at once, so you should not get caught up in the idea that you have to be ready to close a deal right now. The best thing you can do is to come up with a simple plan that helps you get everything you will need in the future to buy a house. The team at Streamline Realty is here to help give you some guidance on what should be in every home buyer’s plan.
Save for a Down Payment
One of the biggest mental hurdles that home buyers face is the idea of having to pay for a down payment. The truth is that saving up for a down payment is not as overwhelming as it might seem. If you are able to rent a new place, then you are closer to being able to afford a down payment than you even realize. When you try to rent a new place you have application fees, security deposits, first-month rent, and sometimes even last-month rent. Additionally, rent prices are rising dramatically. According to recent data rent has risen over 11% across the nation since January. If you can afford to pay all of this to rent a new place, then you are not far off of a down payment. Chances are that you just need to save a little bit more.
There are two things you can do today to help you save for the little bit extra that you will need to pay a down payment. First, make a budget. Account for all of your expenses and all of your income, then plan for a reasonable amount that you can set aside. Second, open up a savings account that is dedicated to saving for a down payment. Making a “sink fund” separate from your other savings accounts, such as investments or emergency funds, helps you visualize your goals. It also makes it more difficult from a psychological perspective to pull from it. If you have a dedicated savings account for a down payment, you are less likely to think of it as money that you can use for other items.
Improve Your Credit Score
Improving your credit score is simple and can make the home buying process a lot easier. The average credit score for first-time home buyers is 716. If your credit score is already abve 716 it is still worth trying to improve your score. Higher scores often lead to lower rates when you apply for a mortgage. If you are below 716, you do not need to worry. First of all, there are lots of lenders that will work with you even if your score is lower. Second, there are simple things you can do to greatly improve your score. Paying down credit cards is one of the quickest ways to boost your score.
Find a Trusted Mortgage Professional
Even if you are not ready to apply for a mortgage, you still want to start working with a mortgage professional right away. They have the relationships and expertise to advise you on the things you need to do to set yourself up financially to buy a house. Having a mortgage professional in your corner will make it easier for you to get pre-qualified for a mortgage, which is important. Pre-qualification is important for home buyers because it lets sellers know you are serious and that the transaction can close relatively quickly. This will help set you apart from other home buyers when you are ready to purchase the home of your dreams.
Final Thoughts
In the abstract, buying a house seems very difficult, especially to first-time home buyers. However, it does not have to be. If you break down the home buying process into simple steps, then it becomes much more achievable down the road. In the end, the things that are worth doing the most are often the things that appear to be most difficult. Buying a house is a cornerstone of the American dream and with a little preparation today, that dream can be your reality tomorrow. If you are ready to start planning to buy a house, please contact us. The team at Streamline Realty is here to help guide you through the entire process.
