Posted by Stacey Smith | DIY, Saving

6 Tips to Prepare You to Purchase a Home

"Cube Home" by Randen Pederson i

Whether you are looking to purchase your first home,  a seasoned buyer, or just starting to save for your first home, Your home is one of the biggest investments you will ever make.

There are many things you need to do before you start looking for that dream home. You have many questions running through your head and don’t know where to start. It is important to do some research to give you the confidence to know that you are making the right decision.

Closing on your first home is exciting and is a very sunny day. What is a sunny day, you might be wondering. A sunny day is feeling confident, in control of, and optimistic about your money. I just closed on my first home and I want to help you know what you will need to do, to prepare for the process of purchasing a home.

6 Tips to Prepare You to Purchase a Home

 

Save towards a down payment

Start saving the sooner the better. You don’t need to save thousands of dollars a month to save towards a home. Whether you can save $200 or $1500 a month, the important thing is you are saving towards the purchase of a new home. The more of a down-payment you have, the less you will pay each month on a mortgage.

Know your Credit Score.

I can not stress this enough. There are plenty of free sites out there that will never charge you to get your credit score. Along with the three major credit reporting bureaus. Your credit score will determine whether you have poor and/or excellent credit. If your score is in the 500’s wait and build your credit before trying to purchase a home. If your credit score is in the mid 600’s to 850 you should have no problem getting a mortgage.

Determine what you can afford.

Take a good look at your finances and determine if your budget allows you to be able to pay for mortgage. Now remember to determine what you will be able to afford, you do not want to be house poor (where you literally can only cover the mortgage and no other expenses). Once you have determined your credit score and whether or not you are financially ready to buy a home you will need to see if you qualify for a mortgage. Also check out a mortgage calculator to give you a ball park figure as to what you can afford monthly.

What is the best mortgage for you?

Research whether you want a 30 year mortgage, a 15 year mortgage, and the current mortgage rates. A 30 year mortgage is the most popular option because it lowers your monthly payments. If you can afford a 15 year mortgage then consider it as a viable option. Are these mortgage rates good? 4-6 percent is a decent rate, but try to get the lowest rate possible. There are many mortgage options available. Research what type of loan you want to apply for and determine if 20 percent down is required for that particular loan. Some are no money down, so it is worth the effort to discover the best loan for yourself.

Get Pre-Approved for a mortgage

It is important to try to get pre-approved for a mortgage. This will determine what kind of home you can afford to buy. Most importantly, it determines the price point at which you can begin to search for a home. Sellers will take your offer more seriously if they know you are pre-approved. Being pre-approved  is a time saver in the process of obtaining your home.

Determine the City and Neighborhood you want to live in

Location, location, location are the three most important rules in real estate. Research the type of neighborhood you want to live in. Answer these questions.

  • Does the neighborhood have good schools?
  • Is there a hospital nearby or is it located in a neighboring city?
  • What is the crime rate in the area you are interested in?
  • Most importantly, Does it meet your family’s needs?

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Once you have found the perfect place, the next step is to make an offer on your dream home and hope it is accepted by the seller. Once the offer is accepted, you will close on the house and officially become a homeowner. Congratulations you own a home. Closing on your home is a sunny day!

Sun Trust bank believes that everyone deserves the financial confidence and freedom to live a life well spent. We should all plan for a sunny day.

Sunny Days start here.  At SunTrust, they have the tools and resources to help you achieve your sunny day. Start here to find out how they can help you enjoy the things that matter to you.

At SunTrust Bank their purpose is lighting the way to financial well-being. When you feel confident about your money, you can save for your goals and spend knowingly on what matters most to you.  They know we all live for the sunny days and want to you help you live yours.

For even more sunny day inspiration visit yoursunnyday.com

Subscribe to the Shine newsletter and receive inspiration and advice twice a month to help you live for a sunny day.  

Visit the SunTrust resource center anytime for help achieving your financial goals. 

 

This is a sponsored conversation written by me on behalf of SunTrust Bank. The opinions and text are all mine.

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