- Don’t put a lot of money down
Maybe you’re still paying off student loans. Or you’re just getting into the workforce. Your parents may have told you they put 20% down on their house and you’re like, what?
Ignore them. You can become a homeowner with as little as 3% down. That’s only $3,000 for every $100,000.
You’ll need a bit more for your closing costs and escrow for insurance and taxes, but, with some careful planning and saving, you can do it. I have complete faith in you.
- Think rescue, recycle, gently used
Moving forward with a four-legged addition? Think adoption first and save some serious green. Thought I was talking about pets only? We’re also talking kitchen tables, coffee tables, dining room tables, end tables, dressers, sofas, and yes, even beds have four legs. Don’t be a spendthrift.
- Do the wedding bell whoa
Easy, Joe! If you are getting hitched, consider scaling back on the big shin dig and use that money instead to invest in a new home. Friends and relatives will be happy to cheer on your new life together with appetizers instead of an extravagant sit-down dinner. Oh, and ditch the traditional registry for something like www.honeyfund.com that allows you to raise money.
- Find out your credit score, then improve it
It’s like not knowing your weight. Ignorance is not always bliss. Trust me on that one. You’ve got to know where you’re starting so you can keep an eye on things. You’ll need a credit score of 620 for Federal Housing Administration-insured loans and 720 for conventional loans with primary mortgage insurance. You can check your score for free, you know.
Now that we’ve got that out of the way, don’t be late paying anything. Ever. Don’t cancel credit cards you don’t use. Don’t apply for any new credit cards. And don’t make any large purchases before you buy because they will affect your debt to income ratio. Duh! Be late to work, be late to the movies, but don’t be late with your payments!
- Calculate what you can afford and get a mortgage preapproval letter
Do this before you start actively looking for houses! Here’s a handy link for you. Go ahead and crunch the numbers.
- Find a real estate agent to help you with your home search
Didn’t see that one coming, did you? Seriously folks, you’ll be saving time, tears and money. An agent doesn’t get paid unless the deal closes, so he or she is going to work very hard to find you exactly what you want. A good agent will have resources, connections, market knowledge, and negotiation skills that will blow you away. After finding the right agent, you would as soon as look for a house alone as do surgery on yourself.
Happy house hunting!