First Time Home Buyers- Ways to Start Planning Early

First TimeHome-buyers

Ways to Start Planning Early

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If you have purchasing a home on your to-do list

in the next five years or so, the time to start getting

ready is now. You might wonder why you should

be so concerned with something that is not going

to happen for several years, but proper planning

will help you reach your goals. There is no surefire

way to tell what credit restrictions and mortgage

guidelines will be five years from now, but to err

on the side of caution, here are five things that you

can start doing now to ensure that you get into the

home of your dreams in the future.



Build up your Credit



You will need a credit history. If you are a student or athome living with mom and dad, this could be difficult – butnot impossible. It is especially important if you are notgoing to have a rental history to provide a lender withwhen you apply for a loan. Start applying for credit cardsresponsibly. If you do not have any credit cards, now is thetime to apply for one, even if it is a secured card. Once youhave a credit card, use it, but sparingly. You need to buildup your history by charging purchases and paying themoff as soon as possible. The activity on your credit will helpyour credit score to increase. Just be careful not to chargeso much that you cannot afford to pay it off. Other ways tobuild up your credit including taking out a car loan orstudent loans, just be mindful of timely payments and yourcredit history will build on a positive note.



Start Saving



It is never too early to start saving for a home.Even if you can only put a small percentage ofyour income away at a time, every little bitcounts. Many first-time homebuyers rely on giftmoney from relatives to get into their first home,but if you can do without that, it will put you in abetter position with various lenders. The largerthat your initial down payment is on your home,the more programs that you will be eligible forand the lower the rates will be on yourmortgage.



Keep Careful Records



When you apply for a mortgage, you will needrecords of just about any financial transaction thatoccurs in your life. This means that you will need tokeep your tax returns, W-2s and paystubs as proof ofyour income. You might need bank statements anddeposit slips to show proof of various deposits andyou might even need cancelled checks or statementsto prove that your debts are paid off as well as paidon time. Start a file now with all of the importantfinancial records that could be needed for yourmortgage application to cut down the stress of riflingthrough papers when the time comes to apply.



Keep a SteadyIncome



If you are a student or a recent graduate, it can bedifficult to keep your income steady, but it is importantto try your best. Lenders today want to see at least twoyears of steady income. This means not bouncing fromjob to job or leaving large gaps in your employmenthistory where you had no income at all. The moreregular your income is during the years leading up toyour mortgage application, the more favorable lenderswill look at your file. For some students this mightmean putting off purchasing a home until their incomehas enough time to show a consistent history, but thebenefits of waiting pay off in the form of morefavorable loan terms and rates in the end.



It is possible for first-time home-buyers to geta loan on their own as long as there is plentyof preparation in the years leading up to thepurchase. It is not possible to wake up oneday and decide that you are going to apply fora mortgage and expect an approval. Years ofproper planning, record keeping and savingare necessary in order to ensure a positiveoutcome.



T O L E A R N M O R EBLOWNMORTGAGE.COM

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C L I C K H E R E



Justin McHood is Americas MortgageCommentator and has been providing

Mortgage commentary for over 10 years.

INFORMATION PROVIDED BY: JUSTIN MCHOOD

MORTGAGE COMMENTATOR

Information Originally Published: January 26, 2015 BLOWNMORTGAGE.COM LENDER HOTLINE: 888-581-5008

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First Time Home Buyers- Ways to Start Planning Early

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