You’ve done the math and while you’d love to make your dreams of homeownership a reality, financially, it’s not quite the right time to start your new home search. Don’t fret! Although it may not be the time to buy just yet, there are still things you can do that will move you closer to your goal of buying your dream home or condo in Barrie or the surrounding area. Here are three steps you can take to help you financially prepare for buying your first home:
Check Your Credit Score
Do you know where your credit score currently stands? If you’re not in the know when it comes to your score, it’s a good idea to check it out. Your credit score is one of the top things that mortgage lenders will look at when deciding whether to approve your mortgage loan application, in addition to your income, down-payment amount, general finances, etc.
If you’re not sure what a credit score is exactly, you’re not alone. Often confused with your credit rating, your credit score is a number assigned to you that represents how credit-worthy you are to a potential lender. Based on factors like the amount of debt you carry and your payment history, you can gain access to your credit score by contacting either Equifax Canada or TransUnion Canada.
If you find that your credit score is not quite where it should be – don’t panic! There are also a few things you can do to boost your credit score. Check out my previous blog for the five steps you can follow to improve your credit score and make the mortgage approval process easier.
Build Your Down Payment
The bigger your down payment, the less mortgage you’ll need (which means you will also save quite a bit of money in interest payments!). A bigger down payment also means you will avoid paying extra fees such as mortgage loan insurance.
Building your down payment, while also managing and balancing your other expenses like housing costs or paying down your debt can be a real challenge. To stay focused, it may be a good idea to start using (and sticking to) a budget. A budget can help you monitor and track your spending and reach your personal and financial goals.
Cutting back is another strategy that may help you save for that down payment more quickly. Review the budget that you’ve created and determine whether you might be able to live without some of your variable expenses (things like a vacation, clothing or nights out). Cutting back on the little extras quickly adds up and could help you purchase your first home faster.
There are also a few different down payment options available that you should investigate. Check out my previous blog The Downlow on Your Down Payment Options for the full scoop.
Keep On Keeping On
It can be discouraging to realize that you’re not quite there financially when it comes to buying your first home. That doesn’t mean that it’s time to give up. Checking your credit score, saving for your down payment by following a budget and cutting back, and understanding the down payment options that are available will help you stick to the plan and work towards your dream of buying your first home.
Even though it may not be quite the right time to buy, it’s also a good idea to understand the mortgage options that are available and the mortgage solution that will make the most sense for you. Online resources will help you better understand your options and the process. As an experienced mortgage broker in Barrie, I can also help you review your options and answer any question that you may have. Connect with me today at (705) 315-0516 to see how I can help.