Buying a house. The single largest financial commitment most of us will ever make in our adult lives. How do you go about buying a house? What should you do first?
Find out if you can afford it. Get your FICO score (just an acronym that stands for Fair Isaac Company, developer of the system). This score is one of the tools a potential lender will use to determine the interest rate that will be offered to you. All of your credit information is consolidated into this one three-digit number. Stellar credit will get you the best possible rate. A poor credit score will either get your mortgage application denied or you will be paying a higher interest rate.
Get your financial house in order. Pay off any outstanding debts and DON'T incur any new ones. There are a number of mortgage calculators online. You can get a pretty good idea of how much your mortgage will cost you. Remember the insurance, taxes and maintenance will be your responsibility, so you'll need to allow for those costs as well.
Put yourself on a budget. Know where every penny of your income is going. Your new home won't come with a landlord ready to step in and fix that leaky faucet or replace the hot water heater. You'll want to be ready for that "rainy day".
So, financially you are on solid ground? Great! Read tomorrow's post for what to do next.
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