Be Financially Prepared

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All real estate transactions are different. And especially for first-time homebuyers, they can be pretty complicated. The next few blog posts will focus on what to do and what to think about before buying a home.

Work on your financing as early as possible before taking the leap to purchase a home. This includes saving as much as possible for a down payment and also working on your credit score. Whether it’s paying down debt, getting rid of derogatory marks, or simply building up a pretty much non-existent credit history, it’s never too early to begin improving your credit. This could take a very long time, but it’ll be worth it when you find yourself applying for a mortgage.

You should be checking your credit at least twice a year mostly to check for any errors that can easily be corrected but also to see how your score is improving over time. There are three credit bureaus that give three different scores, and lenders use the middle number.

Interest rates are based on several factors, the most important one being your credit score. It must first be high enough for you to even qualify for a mortgage loan to begin with – usually a 620. And the higher the credit score, the lower the interest rate can be. Just remember to shop around. Closing costs and mortgage rates can vary widely from lender to lender.

TIP: Try not to open any new accounts prior to applying for a mortgage. The more new accounts you have open, the lower your credit score can get.

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