So you’ve recently decided to pursue homebuying. Congratulations! Here at D.R. Horton we understand the value and need for such an investment. Expanding families, relocation, renting and more all contribute to this decision. Sure, there are a multitude of things to prepare for, but the biggest are your finances. The question for you to ask yourself, is…
“How financially prepared am I?”
This blog will cover the information you need to improve your financial situation, and get you approved for the home of your dreams.
Improve Your Credit Score
You’re credit score is very important, and is the ultimate deciding factor in regards to qualifying for a mortgage. It also drives the interest rate you will receive for that mortgage. Most lenders provide the lowest rates to customers with a credit score of 740 or above. Customers with credit scores below that will be expected to pay higher interest rates, and often times higher down payments.
In order to improve your credit score, consider paying down debts such as credit cards, student loans and car notes. Also, making consistent payments on time will improve your credit score over time. You should also keep your debt-to-income ratio under control. This ratio should be no more than 43% in order to qualify for a home loan.
Determine How Much Home You Can Afford
Some first time home buyers make the huge mistake of accepting a very large home loan. Just because you qualify for a $350,000 mortgage does not mean you should borrow that amount. Consider using mortgage calculators and factor in ALL of your living expenses. Make sure to budget enough so that you can enjoy life. A brand new house isn’t that exciting if you don’t have money left over each month. Accept a mortgage payment that is comfortable enough for you and your family. Don’t think a smaller mortgage is possible? D.R. Horton – Express Homes offers affordable, quality homes for first time buyers. Take a look at these for example in Houston, Texas.
In conclusion, becoming financially prepared for homeownership is possible. Follow our recommended guidelines, and you will be ready in no-time. Learn more about our National Red Tag Event to receive information on great homes at an affordable price.
Leave a comment below and tell us what ways you are financially preparing to buy a home.