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Preparation is Key for First-Time Home Buyers

Buying your first home can be very intimidating, and a bit scary.  You want to make the best decisions about your future and be equipped with the knowledge to achieve your goals.

If you would like to buy a home within the next year, there are things you should be doing right now to prepare yourself. Tackling each challenge, one at a time, may get you there faster than you think!

First, you need to know approximately how much you will be spending on your new home.  Check out some homes on line in the areas where you want to live.  How much does a home cost that will work for your current and near future needs and expectations?  Don't expect to live in a house like your parents.  This will be your first house, so compromising on space and amenities will probably be necessary.  Remember, location . . . location . . . location, are the 3 most important factors when buying a home.  You can always change the home itself, but you can't change where it is located.  

Even though you're not quite ready to buy, you should contact a lender now to discuss your unique situation and discover what you need to do, specifically, in order to qualify for a mortgage, in what general price range you can buy, and approximately how much down payment monies you will need.  If you don't already know a lender who can give you the guidance you need, contact us.  We can put you in touch with lenders who will take the time to help you put a solid plan together.

In general terms, before you start saving for a down payment you should get a handle on your biggest debts.  For many young people, the biggest debt is their student loan payment.  Although we're not financial advisors, if your debts are keeping you from qualifying for a loan right now, then paying those debts down with a solid plan in place makes the most sense.  Depending on the timing of when you would like to purchase, you may want to aggressively pay down the student loan debt while still saving some money for a down payment.  The balance will depend on your available funds and the financial requirements of each.

According to a recent study by Experian, the Millennials have an average credit score of 625, which is lower than both the national average and the average for every other generation.  Get your credit score, and if it is in the average or below average range, then start working now to increase your score.  Don't let a lower score scare you away from the process.  There are lots of things you can do to boost your credit profile, but you need to start now. Your lender will give you specific goals to reach and tell you specific things that need to be done to improve your credit profile.  

The key to success is to have a solid plan and follow it.  So get the best advice you can and stick with the plan, one step at a time, until you achieve your homeownership goals.  We're always available to answer as many questions as you have, so don't hesitate to call on us for assistance.