Financial preparation is the first–and perhaps the most important–step in the home buying process. Get ready for your purchase by taking a careful look at your finances, especially your savings, credit, income, and debt.

Down Payment Options

Buying a home doesn’t necessarily mean  having  to make a large down payment. VA offers a no down payment mortgage and in some cases builders with a large inventory will help with the down payment to move the house.

If you have a down payment goal in mind that you need to save for, you’ll reach  it more quickly if you stick to these simple rules:

1. Pay yourself first. When you pay your monthly bills, the first check you write should be to your savings or investment account.
2. Avoid unnecessary purchases. The less you spend on big-ticket items that you don’t really need the sooner you’ll become a homeowner. Keep that goal in mind when you shop.
3. Set realistic goals. Take an objective look at your monthly income and expenses, and decide how much you can really afford to put aside. If saving for a home causes you to fall behind on your other obligations, it will defeat the purpose.

Your Credit

The way you use credit is an important part of the mortgage equation. Your lender takes your credit history into account when deciding whether to approve you for a mortgage, and what interest rate you will have to pay.

If you’ve experienced financial difficulties that may have impacted your credit. It doesn’t mean you can’t get financing to buy a home. A good mortgage company can help you begin moving beyond short-term problems into a lifetime of secure home ownership.

Income and Debt

To qualify you for a home loan and determine how much you can borrow, your lender will compare your income to your outstanding debt.   Guidelines vary, but lenders usually prefer that the amount you spend on monthly debt and housing expenses be no more than 36% of your gross monthly income. Try to avoid taking on any new debt in the months leading up to your purchase.

Even if your debts add up to more than 36% of your income, that doesn’t have to mean you can’t get a mortgage. A good mortgage company can help make ownership affordable for people from a variety of financial backgrounds.