Despite the current credit crisis, now is a good time to be a first time homebuyer if you are mortgage ready and a good money manager. There is a glut of houses for sale across the nation and sellers are very motivated. An article on CNNMoney.com recently stated that “For the first time in years, entry-level homes are affordable.”
The first step to owning your own home is to attend a Free First Time Homebuyer Seminar sponsored by your local Housing Authority or Coalition. Becoming educated on how the home buying process works is very important. You can also find a Housing Counseling agency by visiting the U.S. Department of Housing and Urban Development.
This information is to help the potential home buyer understand what credit is and how important budgeting can be when you want to get approved for a home loan. Becoming “mortgage ready” may require a little bit of time and effort but it will be easier than you think once you understand how credit and budgeting work.
If you want to buy a house, start by estimating what you can afford and make a budget. Be thorough with your budget. Buy a notebook or make yourself daily tracking sheets and at the end of each day record what you spent and what you spent it on. Do this faithfully for one month. Check over your tracking sheets and make a list of NEEDS vs. WANTS. By eliminating some or all of the wants you can start saving for your down payment. Carefully put together a monthly budget. List your income: include wages and salaries and any additional pay. List your expenses with the help of your daily tracking sheets. Don’t forget to include an amount to cover unexpected expenses such as car repairs. The amount left once you deduct your expenses from your income is your disposable income. Open a Home-Buying Savings Account and put as much disposable income as you can away each month to help you achieve your goal.
Credit Card Debt:
Every person in the U.S. has access to one free credit report per year from each of the three major credit reporting agencies, Equifax, Experian and TransUnion. You can access your free credit report via our website.
Negative reporting on your credit report will affect your credit score, affect your ability to qualify for a mortgage and affect the interest rate you are offered. To resolve negative issues follow these steps:
A credit counselor can assist you if you need help reading your credit report.