Brenda Brown, Real Estate Broker

Here are a few quick tips and a bit of information to get started in the process:

1. As a rule of thumb, you should start with looking at how much money you make each year.  You can multiply that number by three and this amount should be what you can afford in a new home, give or take a little bit.  For instance, if you make $100,000.00 per year, you should be able to afford a home worth $300,000.00.
2. Your next important step involves working with a reputable lender for a pre-approval.  A  discussion with a lender may show that you have some issues to overcome prior to beginning your hunt for a new home in earnest.

Listed below are some possible considerations to help you increase your buying power:

1. How is your credit?  Do you have any unpaid bills, medical expenses, judgments, or liens against you?  Clean this up first, making sure that the company you owe and pay reflect this toward your credit report.  Don’t forget you can get a free copy of your credit report from the major credit services once per year and any time that you are denied credit.   Another thing to look at when thinking of your credit is do you even have any at all.  Have you bought anything on credit at all?  Using credit and paying it off will show that you are a good risk. 

1. Now what about those fixed expenses?  I am talking here about car payments, credit cards, lines of credit, insurance payments, boats, RVs, ATVs, and other sports vehicles.  Do you pay more than what you need?  Is it time to sell something to get one of those credit cards down to a zero balance?  How many toys, cars, and the like do you have that have monthly payments on them?  There is nothing wrong in selling your more expensive car now in order to purchase a less expensive one that you will not have payments on.  Do you have more insurance than you need?  Have you shopped around for insurance companies, making sure you are paying what you should and getting what you need? If you have credit cards and lines of credit, you can do something about those.  You may consider lowering the amount you can borrow and paying them all down to at least less than 50% on the owed amount less than your card’s maximums.  Lower your debt as much as you can to get the best home you can afford.

Please keep in mind that I am not a professional lender and am giving you my opinions on getting you prepared to search, find, and purchase that first home – or any home.