Everything You Need to Know About Buying Your First Home

Are You Eligible to Buy a Home?
When beginning the home buying process, it’s crucial to get a copy of your credit reports and
scores. If you’re buying with a spouse, or someone else, they’ll need to run their credit too.
You’ll want the highest score possible, before you apply for a mortgage. A score of 740 or
higher is considered to be excellent credit. Typically, anything below 700 is not considered
excellent credit. However, this doesn’t mean you can’t get a mortgage.
If you have bad credit, don’t panic, as there are different ways to improve your credit. One of
the best ways to improve your credit is to try to stay below 30% of your total credit limits. If
you have past due payments, deal with them. Add all your due dates to your calendar to make
sure your bills are up to date and paid on time. Remember don’t open new credit cards if you
don’t need them, and use your credit responsibly at all times.
According to industry standards, you should not spend more than 30% of your monthly
income on your monthly expenditures. Remember credit utilization and effective budgeting
are key, and creating a budget that you can stick to is easier than you think. The best way to
do this is by determining all your sources of income and then tally up your monthly expenses.
For expenses, make two specific columns, one for fixed expenses such as rent, mortgage,
insurance, car payments, etc. and another for variable expenses such as entertainment,
travel, food and other expenditures. Generally, variable expenses are easier to control. Then,
analyze all of your expenses — especially the variable ones — and see what you can cut out.