The first step in the home-buying process is to be sure that you’re as fully informed and educated about the home buying process as possible, and that you know you have the financial resources to purchase a home in the Bennington area.
Get Your Finances In Order
- Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you have actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses such as car repairs, illnesses, etc., as well as more predictable costs such as rent.
- Reduce your debt. Bennington lenders generally look for a total debt load of no more than 36% of income. Since this figure includes your mortgage, which typically ranges between 25% to 28% of income, you need to get the rest of your installment debt—car loans, student loans, revolving balances on credit cards—down to between 8% to 10% of your total income. Your mortgage broker will advise you as to what debts you may need to pay down in order to qualify.
- Increase your income. Changing jobs may not be a good idea at this time, so consider ways that you could increase your income in your current job.
- Save for a down payment. Although it’s possible to get a mortgage with little to no money as a down payment, you can usually get a better rate and a lower overall cost if you have a larger down payment. Aim for saving a 20% down payment.
- Establish a good credit history. Get a credit card and make payments by the due date. Pay off the entire balance promptly. Do the same for your other bills.
Following these guidelines will help you set reasonable financial goals as you begin your successful home-buying journey. Call Maple Leaf Realty at 802-447-3210 for more information.