2015 Will Be The Year You Get Into Financial Shape To Own a New Home
January 15, 2015
Most new years resolutions start something like, "I want to get into shape...." We've put together some tips and tricks to help you get into financial shape to move closer toward that dream of owning your own home in the Oklahoma City Metro. With so many homes to choose from, and our prices starting from the $130's in some of our communities, we want to help potential homeowners go from dreaming about owning their own home to doing it! Let's get started. There are a lot of things you can do as a first time homebuyer to put yourself in a good position. Check Your Credit Scores - Credit scores are one of the first things you should look at when embarking on the journey toward a new home. You can run free credit checks on certain sites, and take a reading on how you are doing. Credit scores can affect your ability to get a loan. The good news is that in 2015 they are loosening the standards a little bit compared to years passed. Write Some Letters - If you find inaccuracies on your credit report write to the credit reporting company and enclose copies of supporting documents to prove your point. Identify each item you are disputing and request it be removed or corrected. Then write a letter to the creditor you are disputing and provide any supporting documents (copies only) to illustrate your issue. Payoff Credit Card Bills - Debt to income ratios contribute to how much you can borrow on a home loan. Whenever possible, pay down and pay off credit cards and other loans such as car loans. Avoid New Debt - It may look like a good deal to save 15% on this purchase, or 20% on that purchase, by opening up a credit card in the store du jour where you happen to be shopping. But in reality every new card can adversely affect your credit. Don't Close Old Credit Cards - Keeping cards you don't use anymore may seem like a nuisance, but closing old cards may actually have an unfavorable effect on your credit. Leave them opened but don't use them. Don't Bite off More Than You Can Chew - When shopping around for a home to buy, make sure you budget accordingly. Historic lending guidelines say your principal, interest, property tax, and insurance should not surpass about 28% of your gross income. Make sure though that you run the numbers for any other cost of living expenses. You may be able to go past this marker and be comfortable if you don't have a lot of other debt. Consider future expenditures. Is there a college tuition coming up? How about a big wedding for which you are paying? Think about other big financial items that may draw on your monthly income and consider all of this when calculating the right amount to spend on a home. Next time we'll talk about how to stay in financial shape once you purchase a new home!