Congratulations! You have decided to take the step to buy your first house. You are ready to put your days of renting behind you and can’t get into a house fast enough. There is a lot of excitement around the decision to buy a house. But there is also a lot of work to be done in order to have the best home buying experience, and it starts with getting yourself financially ready. Follow these 4 steps to buy your first house.
  1. Look into your credit report and score

When you apply for a mortgage, your lender is going to look at your credit score to decide if you are a safe risk to loan money to. Your credit score is a big indicator to them because it shows how you have handled credit in the past. If you have racked up a lot of debt and don’t make your payment on time, it is going to be a huge red flag to lenders. On the other hand, if you have a high credit score and show that you keep balances low and always pay on time, it will be a different story. You want to have a score over 740 for your best chance of getting a loan and a good rate. There are options for you if your score is lower than that, but you will want to speak with a lender. If you discover that your score is lower than you would like it to be, find out what’s on your credit report that is causing your score and start working on bringing it up.
  1. Check out your monthly cash flow

Before you buy a house you want to have a good grip on how your monthly cash flow works. Are you living on a budget so you understand where you money is going? It is important that you understand how much you have coming in each month and what you are spending it on, whether it is a necessity or an option. This will help you start to realize how much you can comfortably afford to spend on a monthly mortgage payment while still being able to live the life that you want.
  1. Get your documents in order

Your mortgage lender is going to want to see proof of your financial situation. This will include things like bank statements and pay stubs. You may need to provide copies of your tax return for several years. Take the time to prepare these documents before your meeting so you walk in prepared.
  1. Save for a down payment

It is recommended that you have a 20 percent down payment when you purchase a house. Some lenders and loan types will require you to have at least that much. If you don’t have that much saved yet and really want to get started purchasing a home, talk to a mortgage lender. There are some programs that assist with down payments, and there are some loans that will allow you to make a smaller down payment. Talk to multiple lenders to find the best program for you. Your home buying experience will go smoother if you are prepared from the start. Make sure your finances are straight and that you are realistic throughout the process. Choose a lender that you are comfortable with and talk to them about pre-approval. Then, when you start looking at houses, you will know what you can afford.