Advice for First-time Home Buyers

6/8/2022 2 minute read

3 steps to get you to your home buying goal

Signs It’s Time for a Financial Check-up

The ins and outs of home buying can be complicated – especially if you’re a first-time home buyer. But there are some important things you can do to prepare yourself financially for the journey you’re about to embark on. We’re here for you with three steps you should take before you make an offer on a home.

 
1. Understand your current financial situation
First things first, before you do anything you need to get a handle on your expenses. If you don’t have one already, put together a spending plan to ensure you know everything that is coming in and going out. Next, look at your savings. Do you have money for a down payment? We may think we have to throw our whole savings in for a down payment, but you want to make sure you leave some money in there for emergencies and other goals. Finally, know your credit score (visit eCoach Lea below to get started). Your credit score is a critical piece of the loan approval process. Knowing where your credit score stands gives you the knowledge you need to identify opportunities for improvement, so you qualify for the best rate possible before making this big step.

 
2. Prepare to apply for a loan
What is affordable? Knowing how much you can spend each month factors into how much loan you should agree to take on. Put together a new spending plan that considers your new loan payment, all financial obligations and savings goals. Be sure your new spending plan accounts for variations in electricity, water, waste disposal and any other costs that may be different or new for you compared to your current living situation.

Stay current on bills and save as much as possible. Any sudden changes in your credit report will be a red flag for lenders. Make sure no late payments pop up, don’t apply for new credit and don’t make any large purchases. Keep as much in your savings as possible. Once you close on your new home, you may find that you need some of that savings to do things you may have not anticipated.


 
3. Choose a loan best aligned with your financial goals
A good strategy is to get a pre-approval letter in advance so you know how much to offer. Many new homeowners go with an FHA loan since it only requires a 3.5% down payment, but that comes with requirements like mortgage insurance. At Credit Human, we have a Slack Builder home loan that is a good option for anyone, not just first-time home buyers, who may not have enough money for a down payment. This loan offers up to 100% financing and you start building equity faster than a traditional home loan.
 

No matter what your dream home looks like or where you are in the process, we’re here to help you reach your home buying goal. Stop by one of our Financial Health Centers or make an appointment with a specialist so we can discuss your unique situation and explore the options best suited to your needs.











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