For any potential homebuyer and investors, thinking about purchase that is far-off may seem like a waste of thought, but positioning yourself for homeownership early on can make the process easier later.
Here are five tips for those who aren’t yet ready to buy but are looking to get their ducks in a row:
1. Establish good credit. Misuing or abusing credit cards can really hurt your credit in the long run. Get a credit card to establish credit, but be sure to use it responsibly. If you have loans, make payments on time. If you rent, ensure your name is on the lease and any bills you have and make sure to pay them on time every month. If it’s already too late and you’re struggling with debt or loans, look into alternative solutions for handling your finances.
2. Start saving money for a down payment. It’s often possible to buy your first home without having much money to put down. However, saving now will make it easier later because you’ll have the advantage of compounding interest. If you don’t already have one, open a savings account and make deposits regularly.
3. Hit the books. Read, read, read! Doing your research will prepare you for taking the plunge. Look for literature and blogs about financial management and first-time home buying. If necessary, take notes and make a realistic plan.
4. Research where you’d like to live. Learn what the economy is like and what it’s like to buy a home where you’re interested in living. This could be the nice neighborhood down the road or another city. Being prepared is key.
5. Ask around for advice. Chances are that you know somebody who can provide crucial information. Maybe you know someone in the real estate business or someone in your family who has been through the process several times. Ask around and find out what they know. Their information could be invaluable later. If you’re stuck, here are some questions to consider: How much money should I save to buy a home? What advice can you give me with regards to financial planning? How affordable is housing in this area? Don’t be afraid to ask!