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It's saving time!

Good morning, it is real estate tips Tuesday, and this week's tips, we're going to continue our series on first home first time home buyers. Last week we talked about what exactly a first time homebuyer is and if you qualify underneath that category. This week, we're going to talk about what's the next step. Once you realize that you qualify to be a first time homebuyer the first things you need to think about is how much money you qualify for for the purchase of a home. You will need to go to a mortgage lender to see what you can qualify for. But first you need to just start thinking about a couple of things. First you want to start saving money for a down payment. Just use 20% as a good starting point, but at least 5%. So you're looking at a few $1,000 depending on what you can qualify for. So since the medium home price in Denver is around $600,000, you want to think to yourself, how much is 5% of $600,000, and that will give you kind of your idea of what you need to save for a down payment on a home. Just because the median home price in Denver is $600,000 that doesn't mean that you can qualify for that much money, you might only qualify for $450,000. So, you might want to check with your mortgage lender first to see what you qualify for before you start doing all the other stuff. Or you can just put money away into a savings account for a future down payment on a new home. There are still a few other things you need to think about saving for other than a downpayment and these are closing costs, which vary depending on what type of loan that you get and other escrowed items such as taxes. If you're a first time homebuyer and you qualify for some of the other programs where they help you with closing costs then you won't have to worry too much about that, but you definitely want to look into closing costs and escrowed fees. So saving money for closing costs, downpayment and escrowed fees such as earnest money, which is the money that you put forward when you're going under contract on a home, which is the money that you are going to put down on a house to save it because you are serious about purchasing the home. This earnest money could range from one to 2% of the list price. The second thing you want to start looking into is improving your credit score. So how do you improve your credit score. First, don't let anybody take out any kind of credit search on you that dings your credit. Some of the other easier tips are to pay your bills on time, don't make any big purchases, such as a car, and don't cancel any major credit cards. If you have a zero balance on it that's okay, but don't cancel them. A higher credit score means a lower interest rate so you definitely want to try to get your score up pretty high, so that you can qualify for those very low interest rates that are going on right now. You might see them as low as 2.8%, and you think you might be able to qualify for that, but sometimes if your credit score isn't great you won't qualify exactly for the lowest interest rate that's being offered out there today. The next thing you want to do is to go find a mortgage lender. I have a few that I can refer to you if you would like if you don't have a clue on where to start there, but you want to shop around and get the best deals. They all offer different things so you just want to make sure that you reach out to them and see what they can do for you. Then, once you've gotten all this kind of information together and you're starting to make the first steps towards being a first time homebuyer, then you can start to look for homes, but you want to make sure that you have all of your credit and saving stuff already kind of in the works before you start looking for homes because you might find a home out there that you you love but that you might not qualify for and that's very disappointing. If you have any questions related to being a first time homebuyer or you need some referrals on mortgage lenders, please contact me through my social pages, and I will get those out to you. And until next week, have a wonderful rest of the week.

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