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Tips for Financial Security Before Buying a Home by Katie Conroy
Homeownership is a dream of many, but some don’t realize the work that goes into getting
ready for this major life step.
You have to ensure that you’re financially able to afford to own your own home. There are several things you can do that can help you with this.
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Cut Non-Essentials Out of the Budget
You need to ensure that you have enough money to purchase your New Home, move, and
enjoy the early days in the house. One option that you have for doing this is to cut out non-
essentials for a while so you can save as much money as possible.
If you’re planning to build a business around your property, like putting it up for rent, make
sure to find ways to minimize your overhead from the start. Setting up a limited liability
company or LLC in North Carolina guarantees a separation between your personal and
business assets, as well as some tax benefits.
Once you trim your budget as much as possible, you can work on saving for the down
payment and closing costs. You can also put some money toward paying off debts that need
to be taken care of before you can close on a mortgage.
Save for a Down Payment
Knowing how much you need to save for a down payment depends on a few factors. You
need to know what’s required for the mortgage program you’re going to work with. This
will be relayed to you as a percentage of the home purchase price: This averages 12%.
Looking at the other homes in the area that are for sale gives you an idea of what you might
need to save for the down payment.
Plan for Closing Costs
You’ll also need to plan for the closing costs that you’ll be responsible for when you close
on the home. These also vary based on the sale price and other components of the
mortgage that you’re taking out to pay for the home. You can ask your lender what you
should expect for closing costs.
Watch Your Credit Report
The mortgage company you work with will want to ensure that you’re responsible with
your money. When you’re planning to purchase a home, you have to be careful with various
things that go on your credit report. Each time you apply for credit, an inquiry is placed on
your credit report.
You should try to avoid those when you’re ready to purchase a home.
You also need to pay close attention to your credit utilization. Ideally, you will get this
down to no more than 10% of your available credit. If that’s not possible, you may be able
to get away with a 25% utilization. You can do this by paying your credit cards down.
Derogatory credit accounts can also have a negative impact on your mortgage application.
You should ensure that you pay off all collections accounts.
In some cases, a credit repair company can help you get these completely removed from your credit report.
Find the Home of Your Dreams
Once you know that you’ll be able to get a mortgage and have the money saved up for a
down payment and closing costs, your next step is to find the home of your dreams. Guard My Credit is ready to step in to help you repair your credit so you can get the
best rates possible on your mortgage. Reach out today.
by Katie Conroy
Are you ready to get started learn more visit us at Guard My Credit https://www.guardmycredit.net/
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