Are you ready to embark on the exciting journey of becoming a homeowner? Congratulations! Purchasing your first home is a significant milestone, but before you start browsing listings and meeting with realtors, it’s crucial to ensure your finances are in order. By taking the right financial steps beforehand, you can set yourself up for a smooth and successful home-buying experience. In this month’s blog series “Winning With Homeownership”, our OppFund team will help you explore some essential considerations and actions that ALL prospective first-time homebuyers should take before they meet with a realtor and start searching for their dream home.
Establish a Budget:
One of the most critical aspects of buying a home is setting a realistic budget. Take a close look at your income, expenses, and savings to determine how much you can comfortably afford to spend on a property. Remember, this is not renting anymore. Consider factoring in additional costs such as property taxes, insurance, maintenance, and potential future expenses. Creating a detailed budget will help you narrow down your options and prevent you from overspending.
Save for a Down Payment:
A down payment is a significant upfront payment you make towards the purchase price of a home. Saving for a down payment can take time and discipline, so it’s wise to start early. Most community lenders like OppFund require a down payment of up to 10% of the home’s purchase price. There are some good options to assist with Down Payment Assistance (DPA) Currently available. So do your own independent research but also ask someone on our lending team for suggestions as well.
Improve Your Credit Score:
OppFund considers credit, but not as a sole determining factor. We are a character based-lender. As such, we will look at other compensating factors to help determine your ability to handle the loan requested. You should be aware of your credit profile regardless. Before applying for any mortgage product, review your credit report for any errors or discrepancies. Take some steps to improve your credit score by paying bills on time, reducing debt, and keeping credit card balances low. The ultimate goal for us is to help you move to traditional financing over the next few years. A higher credit score can potentially save you thousands of dollars over the life of your mortgage.
Get Pre-Approved First:
Obtaining a mortgage pre-approval is an essential step before you start house hunting. This process involves a lender evaluating your financial situation and determining how much they’re willing to lend you. Having a pre-approval letter in hand not only demonstrates your seriousness as a buyer but also helps you narrow down your search to cover properties within your budget. It provides a competitive edge in a competitive market and streamlines the overall home-buying process. You can begin the process with OppFund by visiting: www.oppfund.org/fresh-opportunity-mortgages/
As you prepare to enter the world of homeownership, it’s crucial to have your financial ducks in a row. By establishing a budget, saving for a down payment, improving your credit score, and getting pre-approved for a mortgage, you’ll be well-positioned to navigate the real estate market confidently. Taking these steps will not only help you make informed decisions but also set you up for long-term financial stability as a homeowner. Our team is available to assist you on this important journey.
Stay tuned for more insights this month.