Buying a home. It’s become part of the American dream. Yet for all too many Americans, homeownership seems out of reach. This could be due to economic disparities, especially among low and moderate-income families but sometimes it’s just a problem of too much debt. If you have dreams of buying a home in the next few months or even the next year, keeping these financial tips in mind can help you pay down your debt and be better prepared for homeownership:
Focus on Improving Your Credit
When you are looking to purchase a home, the first place you need to start is with your credit reports. You can pull free copies of your reports from all three bureaus once per year and there are plenty of websites that make doing so simple. Once you have your reports in hand, be sure to look through them for possible mistakes and potential areas for improvement.
If you need help rebuilding your credit, the services of Justine Petersen can also be very helpful. Just check out these success stories from past satisfied customers who have been able to repair or improve their credit, so they can take back control of their lives. Then look into these services for yourself to make buying a new home less expensive and stressful.
As you start building your credit score back up, you should also be aware of the differences between good and bad debt. While too much of any sort of debt is never a good thing, having an established line of credit from a car or previous home purchase could in fact boost your odds of being approved for a new home loan.
Then Start Preparing Your Home
If you currently own a home, chances are that you will need to sell it prior to buying a new house. To keep yourself from accruing even more debt, it’s important to plan out any updates or repairs that are needed before placing your home on the market.
For example, if you want to preserve curb appeal for your current home, you may need to have dead or damaged trees cleared from your property. Doing so can also prevent any further damage to the house before you sell it. Per HomeAdvisor you can expect to pay between $400 and $2,000 for tree removal services, but be sure to check for certifications, credentials, insurance, and references before hiring professionals. Also, ask for a clear and written estimate.
Now you may also be considering cutting repair costs with DIY projects. While this can save you some money, you need to think carefully about whether you have the expertise, knowledge, and skills to handle the work. Otherwise, you may end up having to bring in professionals to fix your DIY projects and handle the original task, which can add up to even more expenses.
Look Into Your Home Loan Options
Once you have a better understanding of your credit score and the costs to prepare your current home, you can figure out how much home you can reasonably afford. If this is your first time buying a home, there are programs available that can make owning a home much more affordable but you will still need to pay off some debt and improve your credit to qualify.
Now you could apply for a loan with bad credit but know that your interest rates and monthly payments are going to be considerably higher. The way many of these loans are set up can make it difficult to ever pay down interest, which means you will also be making those payments much longer. So it’s always recommended to work on paying off debts and boosting your credit before filling out home loan applications.
Debt doesn’t have to keep you from owning a home. You just need to be smart about paying that debt off, managing expenses, and applying for a loan. So take control of your finances and make your dreams of owning a home come true.
For more tips and resources for paying down debt and creating enduring financial stability for your family, be sure to check out Justine Petersen.
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