Steps to buying a home next summer

It’s not too early to start thinking ahead if you plan on becoming a homeowner. Here are some things to consider before next summer:

Determine what you can afford

Your monthly payments should be between 20-40 percent of your gross monthly income. Use this benchmark to calculate how much of a monthly mortgage you can afford. Be sure to include homeowner’s insurance, utilities and additional monthly costs in your budget. Travis provides a variety of purchase calculators you can use to help determine your financial footing. Simply plug in your figures and see if it adds up.

Scope out neighborhoods

Thinking about location will help you narrow down your search. Once you have an idea of your financial status you can start to compare property values in your neighborhood of choice. Consider the school district, crime rates and freeway proximity. Weighing these factors will help you prioritize your options.

Review your credit score

Your credit score helps determine the rates and conditions of your home loan. Potential homeowners should clean up their credit history and strengthen their credit score to ensure the best interest rate. A good credit score translates to a low-risk investment for lenders. This can offer you a low rate for when you’re ready to buy a home. You can learn more about your FICO® Score and how it affects your finances.

Start saving

The sooner you start saving for a down payment, the better. Be prepared to pay about 20 percent of the purchase price upfront; however more cash saved will increase your chance of home loan approval from a mortgage lender. Saving for your home is crucial, but be sure to set aside enough funds in the case of an emergency.

Are you ready to start your house hunt? Visit our Real Estate Center for more information and guidance on purchasing your dream home.

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