5 Tips to Get Your Finances in Order

For most people buying a home is the biggest financial transaction of their lives. So there is good reason getting your finances in order tops everyone's list of first steps. But where do you start? Here are some tips to guide you in the right direction.

1.  Start saving for your down payment

If you're not already doing this, start now. It's a step you can easily take without any further research or assistance. Start saving as much as you can, if you need to increase the amount later, once you go through your budget, that's fine. Some people find it helpful to use a separate bank account with automatic transfers for this purpose. Contributing larger one-time payments you receive, such as tax refunds or work bonuses, will help reach your goal faster.

Down payment assistance programs are available, so research your options. But even if you take advantage of them­, you'll still need some of your own money. Although it's possible to get a mortgage with as little as 3.5% of the purchase price as a down payment, 10% to 20% is usually necessary. If you end up with extra money, you can use it toward closing costs, paying points to lower your interest rate, or any of other expenses you might have after buying (such as paying the movers, painting the living room or making improvements) A bigger down payment means a lower interest rate and a lower monthly payment.

2.  Check your credit

Mortgages are a lot of money, so you'll need at least a decent credit score to get one. During the actual application process, lenders will scrutinize your finances in the most thorough way imaginable, so you need to know ahead of time what they'll be seeing. You'll want to make sure you look as creditworthy as possible.

3.  Make improvements to your credit

Not everyone will need this step, but if you've found something that needs attention, take care of it now. Here are some examples of what you might need to fix.

• Fixing errors on your report
• Paying off collection accounts
• Paying down credit card balances
• Paying off any debts that are a part of the public record, such as back taxes, or lawsuit settlements.
• Closing credit card accounts you no longer use.
• Paying off other loans
• Reducing the amount of credit you're using
• Repairing any damage resulting from fraud or stolen identity. Unfortunately, this one can take a lot of time and effort, but it's not impossible to overcome.

4.  Go over your monthly budget

Figure out what your current income and expenses are and how much of a monthly payment you can afford. You can also determine where you can make adjustments to help save more money faster for your down payment. Think about how your financial situation will change after buying a home. Are you buying a home to accommodate your new family? Will you have a longer commute and need a better car? Consider these factors when you're deciding how much of a monthly payment you can afford.

5.  Familiarize yourself with the mortgage process and get pre-approved

Before you shop for homes and actually apply for a mortgage, you'll want to familiarize yourself with the types of mortgages, interest rates, and required documentation. You'll want at least a basic understanding of points and private mortgage insurance. Once you're pre-approved, you can start your search for Las Vegas homes for sale.

Our real estate agents can answer your questions about buying a home and help you get the new home you've been waiting for. Contact Wardley Real Estate and get started today!