Homeownership is not a lost dream. It’s a long-term investment. Build the wealth that comes with owning a home by following these five steps.
1. Clean up your credit and reduce your debt. As rates rise, a good credit score and lower debt burden put you in a better position to qualify for a great interest rate. Start now to clean up your credit and cut debt.
2. Save for a down payment of at least 10%. Average down payments for first-time homebuyers range from 6 to 7% (National Association of Realtors). Aiming for 10% lets you build equity faster, reduces monthly payments and eliminates the need for private mortgage insurance.
3. Study home sales in your market. Once you know what type of home you’re looking for and how much home you can afford, research the past six months of comparable home sales to gauge what you’ll need to spend.
4. Set a realistic budget you can live with. There’s your dream home, and then there’s your budget. To find a middle ground, make two lists – one for your must-haves and one for where you can make concessions.
5. Get pre-qualified for a mortgage. Gain an edge on the home bidding process by getting pre-qualified for a mortgage. In tight housing markets, the added leverage of pre-qualification lets you bid faster and more effectively.
Helping you achieve the dream of homeownership. That’s Merrimack Style.