You sat on Zillow for hours scrolling through houses fantasizing about owning your own place. Sometimes you think to yourself, “I can do this!” but then you see terrible headlines on the news and think “Oh God, I’ll never be able to buy my own home!”
Well I’m here to cut through the B.S. and tell you YES you can buy a home and here’s how:
- Save money for your down payment and closing costs
- Pay down your debts
- Work on raising your credit score
- Get with a local real estate agent and make a plan
Saving money for down payment and closing costs
Listen,“Budget” doesn’t have to be a 4 letter word! Start off by writing down your total monthly income and expenses down. Where are you spending too much? What recurring subscriptions are a total waste of money and you can cut out? What streaming services can you piggyback on your parents accounts?
Once you have an idea of where you can stop spending, divert that money into a savings account instead to start building your home buying account.
How much do you need to save for a home? That depends on your situation but on average first time buyers should save at least 3% for a down payment and about 2% for closing costs + $1000 for inspections & appraisal.
Pay down your debts
One of the factors for your home budget will be your debt to income ratio. A rule of thumb is your lender will require your total debts to not exceed 45% of your income. Do you have student loan debt- apply for the newly passed forgiveness Debt Relief | Application | Federal Student Aid by Dec 31 2023.
Are you making just the minimum monthly payments on your credit cards? Allocate more money monthly to paying them off, here’s a great technique you can use How the Debt Snowball Method Works – Ramsey.
Work on raising your credit score
If you aren’t already utilizing a credit tracker then check out Credit Karma or Mint to keep an eye on it. They will give you suggestions about the best ways to raise your credit. Keep your credit card balances low and pay them on time. These are 2 of the best ways to keep your credit score healthy.
When it comes time to get a loan for a home you will want to have great credit in order to get the best interest rate possible.
Get with a local Realtor to make a plan
Hi, that’s me! I have a signature process for getting my buyers prepared called The Buyer’s Edge. This process starts with a consultation to give you a birds eye view of what buying a home entails. My signature process is focused on education which will give you an unfair advantage when it’s time to buy.
In addition I put you in touch with honest, hard working local lenders that will take your financial information and get you an idea of any assistance programs and grants you may qualify for.
Between myself and our lender partners we take the time to slow things down with you so you are equipped to go full throttle when you find the home of your dreams!
Buying a home as a first timer can be scary if you don’t know what to expect. When you work with me you’ll be guided through EVERY step of the way and feel empowered to make the best decisions possible. Buying doesn’t have to be a hassle when you have a great team in your corner!
Send me any questions you have to gaea@homebodygaea.com
