Buying a home soon doesn’t have to be a dream, as long as you start making these simple moves now.
According to the National Association of Realtors, three out of every four renters would prefer to own a home. What’s stopping them from achieving that goal? The fact that over half cannot afford it.
Transitioning from renting to owning a home is not an overnight move. It is a possible one, however, as long as you start planning now.
When it comes to homeownership, two of the biggest obstacles are getting approved for a low-interest rate mortgage and saving enough for a down payment. We’ll reveal what you must do to overcome those obstacles soon so you can move into your home shortly.
How to Buy a Home in the Next Three Years
If three years sounds too soon to buy a home, it’s not. Follow these simple steps, and you’ll be well on your way to achieving that goal.
Check your credit score
You may be wary of checking your credit score for fear that it’s too low. Still, it’s better to know where you stand than to be in the dark since your credit score will play a significant part in securing a home loan. The higher your score, the better mortgage terms you can receive.
According to the Federal Trade Commission, nearly 20 percent of credit reports have errors. Just one mistake could lower your score, which is why checking it is a must.
You can get your credit score for free from Credit Sesame. While it won’t cost you a thing, it also won’t impact your score.
Once you have your score, the site will also give you a credit report card to let you know what needs fixing. By identifying your history’s weak points, you can address them to raise your score before applying for a mortgage.
How much of a score increase could you see? That depends on your situation, but it could be substantial. Three out of five Credit Sesame users see score increases, with 20 percent achieving boosts of 50-plus points within six months.
Keep your spending under control
Don’t let the temptation for other items keep you from saving for your home. For instance, buying an expensive car right now could affect your ability to buy a home soon.
If you use a loan to buy the car, your credit utilization rate can increase. This can decrease your credit score and affect eventual mortgage terms.
When you’re tempted to make a big purchase like a new car, electronics, jewelry, or a vacation using credit, remember your home-owning dreams. They could be put on hold should those not-so-necessary purchases start stacking up.
Start saving for that down payment
Saving takes a ton of discipline. If you find yourself having a hard time saving, you can use the Digs app as a virtual accountability partner.
Created with first-time homebuyers in mind, Digs motivates you to save by matching your contributions.
The goal is to get you to save over $1,000 per month for your first home. While it may sound impossible, Digs uses specific incentives to help you reach that goal, which will help you buy your home in the next few years.