8 Steps to buying a home: First step is Financial Planning

It’s winter in Montana, and the bears aren’t the only ones hibernating.

As is typical, new listings are few and far between right now. However, if your new year’s resolution involves buying a new home, this is a great time of year to get your financial house in order.

• Save up for a down payment. While VA loans can require no down payment, most loans will require at least 3-5%. The gold standard is a 20% down payment, which means you can avoid paying for mortgage insurance and expect a better mortgage rate. Loans for commercial property and mobile homes comes can require 25-30% down.
• Build your credit score. Increasing your credit score, paying down credit cards, and making all payments on time will help you qualify for a loan, and get you a lower interest rate
• If you know you want to apply for a home loan in the near future, it is a good idea to wait to apply for a new credit card or car loan until after you have closed on the house. Accounts that have been open for a long time count in your favor, while new accounts and credit checks count against you.

  Happy house hunting!

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