Buying your first home is both exciting and terrifying. It is a huge financial commitment that is going to last for years. Here are some tips on how to do it the right way.
Talk to a Lender
To begin, talk to a lender. Companies like Sun West Mortgage are always willing to talk to customers to guide them on the lending process. They can share their process and give you tips on how to get ready.
Your debt to income ratio has a huge impact on your credit score. Ideally, you want to be debt-free before applying for a mortgage. If this is not possible, pay your debt down as low as possible before submitting that mortgage application. The lower your debt, the higher your credit score.
Figure out What You Can Afford
A good rule of thumb for determining how expensive of a house you can afford is to calculate 30% of your monthly income. If you take home $8000 a month, budget $2400 for the cost of housing. Note that this cost includes the mortgage payment, insurance, taxes and HOA fees. Be cautious not to buy more home than you can afford, or you might find yourself in a tough spot sometime down the road.
Use these tips to get ready to buy your first home. By being prepared, the lending process will go much more smoothly for you.