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  • Writer's picturekellyzrealtor

Want to Buy a Home? Do These 7 Things!

If you want to buy a home in the near future (think 1-2 years out from now), then these 7 things will help you have a great home-buying experience and end up with a home and financial situation that you love!


1. Research closing costs in your area: Closing costs differ from area to area, so it’s important to research the specific area you’re planning to buy in. Learning about closing costs will help ensure that you’re financially prepared and will make smart decisions when it’s closing time.


2. Decrease your credit utilization ratio: Your credit score impacts your interest rate, and a big component of your credit score is your credit utilization ratio or how much of your credit limit you’ve used. Paying off your credit card each month and getting your utilization down to 0% is the best method, but even just getting it to 10% or lower will seriously improve your credit.


3. Save 3% for your down payment. You don’t need a huge 20% down payment to buy a home. Instead, you can work on saving just 3% of your target purchase price for your down payment. Pro tip: set up an automatic transfer to a high-yield savings account to make saving up your down payment easy and stress-free!


4. Build an emergency fund. When you own a home, you’re on the hook for all the maintenance and repairs and payments. This makes building up a solid emergency fund critical so you can have peace of mind.


5. Research local homeowner grants. Many areas offer grants and buyer assistance programs for first-time homebuyers. See what’s available in your area–you might be surprised at the assistance you can get!


6. Calculate your debt ratio and pay off debt. To get a mortgage, you’ll need to get your debt-to-income ratio under 43%. If you calculate your debt and find that it’s higher, focus on creating a budget so you can pay that debt off.


7. Find an agent you like and trust! Your real estate agent will have a huge impact on your homebuying experience, so it’s so worth the time to find an agent you really love. I recommend that people interview at least 3 agents, so you can see a wide variety of work styles.


If you’re not ready to buy a home now, doing these 7 things will help you prepare to have the best and smoothest home-buying experience.

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