When you finally decide to buy a new home, you first must get your finances in order.  It’s not as simple as driving to the bank and borrowing some money, there are steps you should take to ensure that you have a sizable down payment, that the mortgage company will lend you the amount you desire, that you will be able to afford the payments on your mortgage and that your interest rate is a reasonable one.

First and foremost, obtain your personal credit report and make certain that the information is accurate.  Check for old debts that, while paid off, may still cling to your credit history.  Make sure that if you were listed as an “Authorized User” on someone else’s credit card, their card is not affecting your credit rating.  Be certain that all creditors have listed information accurately and if they have not, contact them immediately to resolve the issue.  Credit problems don’t only affect your home-buying power, but your purchasing power as a whole.  Credit issues can haunt you for years, causing you to pay higher than normal interest rates, finance charges and sometimes even credit rejection.  You can find your credit report at Equifax (800 685-1111), Experian (888 397-3742) or TransUnion (800 888-4213).  You can also get your credit report from several sites on the Internet, just be sure you’re dealing with a reputable company.

While the repair to your credit report is underway, you should start looking for ways to reduce your monthly expenses.  Planning out and sticking to a budget can help a great deal – it’s astounding how much money we spend without realizing it.  When you actually see the figures on paper, the numbers can be staggering and reducing even 10% each month can save you hundreds.  Whatever money you do manage to save should be put into a savings account to be applied toward your down payment.  Paying down large debts and paying off small ones will only work to improve your credit rating and allow you a larger loan or smaller payments.  The money you were sending to these creditors should also be put into the savings account.  A larger down payment allows you more options when buying time finally arrives.

Finally, do not make any large purchases on credit during the year leading up to your new home purchase.  Seeing large financial purchases or any new debt at all could sour the lender on your ability to repay the loan.  Whether you can afford it or not, wait until after the sale is final before purchasing anything outside the scope of “typical”.   The less debt you have when applying for your mortgage, the better your chances are of getting the mortgage you want.

These tips can help make the purchasing process a lot smoother.  You are making sacrifices, but in the end you’ll have what you’ve always wanted – your very own home.  Jim Miller of Coldwell Banker Residential Brokerage can help you find that home and ease some of your burden.  Call Jim today at (603) 801-3987 and find out just how quick and easy southern NH home buying can be.