First time home buyer information
First time home buyer information can help save you time, money and help you obtain the home of your dreams. The process of buying a home isn’t overly complicated for most. You see a home, you buy a home and you move in and live happily ever after. However, the reality is far from that perfect. In this post I will discuss the two most important factors of home ownership.
Credit
Credit is one of the two factors banks or financial institutions use to qualify and lend money to a borrower. Your credit score is a number between 300-850 that depicts your credit worthiness. Scores are broken down into grades. 300-579 = very poor, 580-669 = fair, 670-739 = good, 740-799 = very good, 800-850 = exceptional.
On any given week your credit score moves 10-20 points either up or down. Your actions determine the movement of your credit score. Credit scores do not move randomly.
You take a look at your credit score and it says 720. That is a good but not very good or exceptional credit score. The higher the credit score the better the terms a lender will extend to you. However, most lenders will approve some forms of debt if you meet other requirements and have a 720 credit score.
The average credit score in the US is approximately 695. In school anything above average was passing. A 720 credit score is just passing.
Income
Income is a major criteria for owning a home. Your income, credit score and credit history will determine if a bank or financial institution will lend you money for your home. When calculating how much home you can afford it’s important to include all of your home expenses not just the cost of the mortgage and interest. As a homeowner you are now responsible for all of the home expenses.
We speak to our clients on a regular basis about emergency savings. Having enough funds for a rainy day. 3-6 months is usually enough for most people. Incorporating future savings and future investments is important when determining your budget. You never want to be house poor. Have enough funds to comfortably pay your bills and enjoy not only your home but your life.
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Our resources create a blueprint for building generational wealth, by better understanding; insurance, taxes, credit and what it means to leave a lasting legacy.
