1. Take a class?
There are some programs out there if you're a low to moderate income family that help give first time home-buyers assistance in buying a home. One of the programs, SoftSecond, requires that the applicant take a "qualified" FTHB Class. In need of help? Google it. Or if you live in Lynn, go to www.lhand.com.
2. What can you afford?
There are tons of calculators out there that help you figure out what you can or cannot afford, etc. Like I always say, "google it... you'll find something".
Now, some 'experts' (I wouldn't know who they are), say that we should spend 25% of our paycheck on rent/mortgage. They consider this to be a normal affordable. So if you earn $4000/mth, you would want your rent/mortgage to be around $1000. Not everyone does this... of course. But just for your info.
3. Create a budget and start saving...
Budgeting. A dreaded word for many. Some of us can make a budget, knowing we never stick to it somehow. Some of us don't even know how to budget... too much thinking... hurts my head :).
My financial helper is www.mint.com. EASILY helps me create my budget and save to buy a home. This website also keeps track of all your finances and remembers what you categorize for anything you buy. It creates a chart that helps you understand where most of your money is going and if you're going above your budget, etc. Best of all, it's FREE and helps give me some peace of mind.
4. Work on your credit.
Yes, credit matters. Where to start? Maybe knowing where you stand right now. You can get a free credit report each year by calling one of the credit companies (equifax, etc.). Fix up anything that you believe it's wrong. You will also need to know your credit score... You can get it online for free just for a few days... then cancel it so you don't have to pay.
You get good credit by paying a credit card or loan ON TIME for a LONG TIME. Also, don't close any of your credit cards... just stop using them if you need to. Closing them lowers your score. Having too many people inquire about your credit report/score lowers your score also. But mainly, people just need to know that you are someone they can trust with their loan... that you will pay them consistently and on time. If they can't trust you, they won't loan to you.
Anyone can give you a pre-approval... but to get a final approval, you have to apply to get a loan from the bank... and that can be pretty expensive just to be told 'no' in the end. Be confident when going to the bank or mortgage company.
Go to the next article in this series: The Next Steps to Buying a Home
