A Financial Primer for First-Time Homebuyers
EAP Navigator
For first–time homebuyers, the more you understand about the entire process the more positive the experience is likely to be. Below are tips to help first–timers minimize their stress and maximize their investment:–– Make yourself more attractive to lenders by reducing the amount of debt you're carrying. The lower a potential borrower's ratio, the more favorably a lender tends to view them.
–– Increase your credit score. A score of 750 or higher is “ideal” for potential borrowers.
–– Consider getting pre–approved for a mortgage. A seller who knows you're pre–approved may be more inclined to accept your offer.
–– Find a way to dodge private mortgage insurance. If you're close to being able to make a down payment of at least 20%, try to find the means to do so, such as by borrowing money from a family member.
–– Be careful of overspending on a home. Keep the mortgage/taxes/insurance at about 20–25% of gross monthly income.
–– Favor a fixed–rate loan over a variable–rate loan in order to lock in a low interest rate.
–– Take advantage of tax breaks. Talk to an accountant or financial professional about what tax benefits are available.