Homes for Sale in Columbia Complete First Time Home Buyer Guide. The home buying process can be quite complex, even for those who have been through it a few times. For the first time home buyer, the process can seem impossible. This guide breaks down the home buying process into 15 steps, with information and resources provided to make each step achievable. Also, most states offer first time home buyer grants and low interest loans for those within specific income limits. For most people, these programs can make the difference between being able to afford your first home or not. Here are the 15 steps to buying your first home:
1. Establish good credit.The first step in the home buying process is establishing good credit. Banks and mortgage lenders will not lend to first time home buyers unless the borrower has a history of borrowing money and paying it back in a timely manner. If you have absolutely no credit references, you will need to get some. The most basic way to do this is to visit a local bank and deposit a small amount, let's say $500. You would then apply for a $500 loan, using the money that you deposited as security for the loan. This is the simplest, quickest way to establish a good credit report. If the loan term is for 6 months, make payments for the first 3 months, then pay the entire loan off. Repeat the process with larger and larger amounts. This will build up an excellent track record. Do this repeatedly, and you'll progress to a point where you don't need to deposit any money as security, your track record will be strong enough to be able to borrow with just your signature. Unless you are independently wealthy, or come from a wealthy family, the process of becoming a first time home buyer starts with establishing a good credit history. At the same time that you are building your credit with bank loans as just described, you should also be using credit cards responsibly as well. This means paying off the entire balance every month.
2. Raise your credit score.A high credit score is one of the most important elements to the first time home buyer. Home buyers with high credit scores are able to get the lowest interest rates on home mortgages. As a first time home buyer, it is doubly important to have a high credit score. Here are the basic tactics for getting a high credit score. A. Always pay your bills on time. B. Keep your credit card balances at zero, or at least very low.C. Make more than the minimum monthly payments. D. Negotiate to remove negative items from your credit report.E. Borrow great credit from a relative or close friend. For more in depth information on raising your credit score, we suggest you send for an excellent free kit. Improving your credit score will likely take a minimum of 2 months, but will be well worth the wait. By getting a higher credit score, you will greatly increase your chances of approval on the loan as well as qualify for the lowest rates given only to those people who have the best credit rating. This complete kit is available for free. You simply pay $1.97 for shipping. We highly recommend the Free Credit Repair Kit for those in need of improving their credit score.
3. Save for a down payment & closing costs.When buying your first home, you'll need money for a down payment as well as closing costs. This applies to previous home owners as well as first time home buyers. Lenders want borrowers to have a vested interest in the property. If you've put your own money into the house, you will be less likely to walk simply away from the property. It is very important to start saving immediately. Set aside a certain amount every pay period and stick to it. Learn to live on what remains. Save now for your future, and your future will take care of you. It will be very, very beneficial to save every week, even if it is a meager amount. We strongly suggest that you open an account and discipline yourself to set aside a certain amount every week. It is a habit that will pay dividends the rest of your life. The highest rate savings account that we are currently aware of is at Washington Mutual. Switch to WaMu Free Checking and High-Yield Savings, with a 5.0% APY. Start banking with only $1 or more. Learn more. . Yes, you can open a checking account for as little as one dollar. The savings account currently pays interest at the annual percentage rate of 5.0 % per year. Even if you only save $10 per week, it is a great habit to develop. We highly suggest you discipline yourself to save a certain amount each and every week.
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