The First Step in Buying a Home

The First Step in Buying a Home

You're considering being a first time home buyer, you have a million questions about the process, and nowhere to go to for answers. Well take a deep breath, we are going to give you a step by step guide in the homebuying process.

And in this video, we're going to start with the Step #1 when starting the home buying journey.

The first step to beginning the home buying process is to check your credit score. Before we talk about that, let's talk about what it even is and how to check it.

 First let's talk about why it's Important

 Checking your credit score is absolutely important because this number, in many ways, determines what you have access to. It affects your interest rates, down payment amounts hint hint and even whether or not you can get a credit card.

 This is important to home buying because with a high credit score you can save money on your down payment, get some great rates for your mortgage which lowers your overall costs, and can even have access to homes that were beyond your price range.

 Checking it is imperative because if it's not great, it might be a better idea to improve it first before starting to look for homes.

 You can check it through many different ways, even your own credit card apps can usually do it, but a surefire way is to go to freecreditreport.com

 The higher the number the better. For some point of view, the national average score in 2020 was 710

So what is a credit score? 

Well your credit score is determined by all of your lines of credit. That means every home you've owned, every car you financed, credit cards, and even student loans, all affect this number. Yes even your bankruptcies pop up on the report.

How do I improve it?

How long you have had your credit lines, how much access to credit you have, and the percentage of how much is being used ALL affects the score. Keep your credit lines below 50%, 25 if possible, pay everything on time, and be patient. As your lines of credit get paid off, and as they get older, your credit score will improve. It's all about being responsible

Hopefully this video helps you understand the crucial role that your credit score has on your home buying journey. So before you set out to look at your dream home, make sure you do a financial analysis to figure out where you stand and how you can improve.