Fresh Start Family: How to Finance Your First House
Friday, November 21, 2014, 1:00 AM | Leave Comment
The idea of buying your first home can be very exciting. You don’t have to worry about renting from someone else anymore, and can finally own something of value. However, buying your first house will take a lot of careful preparation.
Here are some great tips on how to finance your first house, and how to be sure you are ready for this kind of commitment.
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Save Up for Your Down Payment
Before you apply for a home loan, it is very important to save aggressively. If you have a decent down payment, you are more likely to get approved for a home loan with a good interest rate.
Most first time home buyers save up at least a 20 percent down payment.
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Fix Your Credit Report
Your credit score is one of the factors a mortgage lender will look at. If your credit score is too low, you probably will not be approved for a home loan.
Before you apply for a mortgage loan, get a copy of your credit report and make sure there are no mistakes on it.
If your credit score is not that high, you should work to improve it before applying for a home loan.
For example, you can start paying more than the minimum balance on your credit cards.
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Consider a USDA Home Loan
Another way to finance your first home is to apply for a USDA home loan. According to USDA Loans Direct, to qualify for the loan, you must have an income of up to 115 percent of the median income for your area.
You also must be without adequate housing and have the ability to afford your mortgage payments, taxes and insurance.
You also might consider a first time home buyer program to help you get started if it’s your first loan.
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Think About a VA Loan
If you have served in the military, you may qualify for a VA loan. This loan lets veterans obtain loans with no down payment. A VA loan is also a lot easier to qualify for than a traditional home loan.
Before you start the application process, you should request eligibility from the VA.
Financing your first home can be a little intimidating, but it is not impossible.
Before you even think about applying for a loan, you should determine how much home you can actually afford.
Look over your budget and figure out how much you can pay each month for a mortgage. If you apply for a home loan you can actually afford, you will be a lot better off in the end.
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