So you are tired of renting an apartment and are ready to become a homeowner. When it comes to buying a home, the learning curve can be steep but no worries! We are here to help! Start by preparing financially. To help out, we have put together a few money tips for first time home buyers.

Take these steps to make the process go smoothly.

Check Your Credit

Your credit score is one of the most important factors when it comes to qualifying for a mortgage. It will affect the cost of the loan. Obtain your credit report and look it over. Make sure there are no mistakes, unpaid accounts or collection accounts. Keep in mind just because you pay everything every month doesn’t mean your credit score is great. The amount of credit you’re using relative to your limit can sink a credit score. Repairing damaged credit takes time. If your credit needs some work, begin that repair process at least 6 months before looking for a home.

Evaluate Assets & Liabilities

Have a good idea of what is owed and what is coming in. This information will need to be on hand and available for the lender to review. Cut back on any unnecessary spending. Keep in mind, if you are self-employed or have a commission based position, your income will be viewed differently. Typically, lenders will need a solid 2 years’ earnings history.

Organize Documents

Lenders require a lot of paperwork so it’s important to stay organized! Start by gathering pay stubs, W2s, tax returns and bank statements. Knowing what you will need and where to find it can save time when you are ready to start the pre-approval process.

Qualify Yourself

Start by assessing and calculating your debt-to-income ratio and deciding on a down payment. Once you have worked through this information, you will have a good idea of what you can afford both upfront and monthly.

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