7 Simple Steps to Purchase Your Family Home

7 Simple Steps to Purchase Your Family Home- Chic and Domestic
7 Simple Steps to Purchase Your Family Home- Chic and Domestic
7 Simple Steps to Purchase Your Family Home- Chic and Domestic 7 Simple Steps to Purchase Your Family Home- Chic and Domestic[/caption]

Getting closer and closer to closing, I feel like I’ve learned so much during my journey from renting, to becoming a homeowner by 25. Especially with being a young couple, we can’t afford to make mistakes… at least not too many mistakes. I’m having a great time being able to share every tidbit of my experience, tips, and some hiccups that we’ve encountered along the way, and if I can save someone else a little bit of trouble on their own journey, even better!

Many people don’t think that they’re capable of home ownership, and other people have no idea where to even start. It’s a lot of overwhelming information in the beginning, but nothing that you can’t get past with some research and preparation. SO, without further ado, here are my 7 Simple steps to take before purchasing your family home.

1. Take a Homebuyers class
Whether you plan to start your home buying journey next month, or next year, I would highly recommend taking time out to take a homebuyer’s class in your community. It will be a great tool to put you in line with home buying terminology, local lenders, grants and down payment assistance, and some courses will even match your saving contributions during the timeline of the course. Taking a class gives you so much information to absorb to get on the right track, and it could even put you on notice of alternative purchasing options.

2. Check Your Credit
I know I know, sometimes it’s scary to see where your credit currently is, but if you’re looking to purchase your home in the future, you want to know your credit score! You don’t want to come to a lender without some idea of what your FICO scores and mortgage scores are. You don’t want to multiple inaccuracies on your credit report, and you also don’t want to be running your credit multiple times if you don’t have to. I recommend using My FICO to check your fico scores for a small price when you know that you’re serious about getting your home.

Check out my post on how to build and boost your credit score here!

3. Save
Whatever path you take to purchase your home, you will need to SAVE! Save, save and save some more. There are so many monetary things that come up during the home buying process, and you want to be prepared or somewhat prepared for them all. You might need to save for a down payment, closing costs, a home inspection, unexpected repairs after closing. Just save, save, save. There are many ways to get around some of these large expenses, but they aren’t always guaranteed, and you don’t want anything to put a halt to your home buying momentum.

4. Research Home buying Do’s and Do Not’s
There are so many resources and communities to give you an inside scoop on home buying Do’s and Do Not’s. This is why I’m here, to provide you with additional information, and give you a piece of my personal home buying experience. Join a Facebook community, google your own questions, or of course make sure you’re subscribed to Chic and Domestic as I share my experience of how I became a homeowner by 25.

Check out my post on Home buying Do’s and Don’ts here!

5. Research Local Lenders
There are plenty of big name lenders out there, and local credit unions are also an option, but I find from my personal experience, and by researching and talking to other people who have become homeowners that having some information on local lenders is key. Local lenders specialize in your local market! Who knows the local market better than them? Research some local lenders with great reviews, or ask around about other’s experience with local lenders.

6. Find a real estate agent that works FOR YOU
Your real estate agent is a key component in this process. You want to make sure that you find an agent that really works and advocates for you, and someone that you feel like you mesh well with. Don’t be afraid to find someone new if an agent isn’t working for you. This will most likely be one of the largest purchases that you make in your life, and you want to make sure that you feel secure in your purchase.

7. KNOW YOUR STUFF
Be sure to immerse yourself in information so that you really know your stuff! Know the things that you want in a home, know the things that are most important to you (Large backyard, large kitchen, smaller home, specific neighborhood, move in ready, a specific school district). Research and know about your options for mortgage loans (FHA, USDA, and Conventional). Know the steps that you’ll need to make to buy, and how to look for red flags, and if there is ever anything that you don’t know, never be afraid to ask questions. No question is too silly or too small when you’re spending your money.

Be sure to subscribe! You don’t want to miss more of my homebuying tips, and updates on my own personal journey to becoming a homeowner at 25.

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How to Build and Boost Your Credit

Purchasing Your Family Home: How to Build and Boost Your Credit - Chic and Domestic
Purchasing Your Family Home: How to Build and Boost Your Credit – Chic and Domestic
Purchasing Your Family Home: How to Build and Boost Your Credit - Chic and Domestic
Purchasing Your Family Home: How to Build and Boost Your Credit – Chic and Domestic[/caption]

*This post contains referral links. I may be compensated for your clicks!*

I’ve learned so much on our home buying journey, so of course I’ve decided to drag all of you along with me! Whether you’re planning to purchase a family home in the near future, or even if you’re planning to buy again, and you want to do it better this time around, I’m ready to share a few ways to assist in building and boosting your credit score for your next big purchase.

An important behind the scenes steps for home buying is securing that strong credit score. After all, this is what lenders look at to decide how likely you are to pay them back. You basically want your credit score to say, “I utilize my credit wisely, I’m good about paying back what I owe, and I even do it all in a timely manner.”
I’m no credit expert, but these are just some of the steps I took that worked out great for me.

Check Your Credit Report
First step is credit building. If you’re starting from the bottom, or if you’re just unsure of where you stand credit wise, a good first step is checking your credit report. Even if you think that you know what’s happening on your credit report, your best bet is to check. Things could be reporting inaccurately, you could be a victim of identity theft, or you could have old debts that you may have forgotten about. Check it, Check it, and Check it again!
Annual Credit Report, Credit Karma, and Experian will get your full views of your report, FOR FREE. Do note, Credit Karma uses vantage scores. Most mortgage lenders use FICO scoring to determine your credit worthiness. Use Credit Karma to keep up with your report only.

Disputes and Debt
If by any chance you have inaccuracies on your report, now is a good time to report them. Look into debt validation letters, and what sort of things you can dispute for. You want to get the ball rolling on this, but you also want to do it accurately, as it can take up to 30 to 45 days for a full investigation of the dispute. A good source that I used was knowledge from Financial Common Cents.

If you have a few accurate, but negative items on your report. It’s best to get them taken care of as soon as possible. Not everything will be deleted after payment, which sucks, but that’s okay. You still want to pay the debt down or pay it off because your debt to income ratio will be a big part of buying your family home. Paying down this debt will do nothing but help you.

Check out a few ways to tackle your debt here!

If your credit needs a boost, or is simply nonexistent I would suggest doing a few things. One being, apply for credit!

Self Lender
Self lender has been GREAT to me. I try to tell people about it any chance that I get because it’s really been nothing short of amazing for my credit. It’s an online CD account for savings. It helps with boosting your credit score by reporting on time payments (as long as your payments are ON TIME) but even better it holds your monthly payments for savings and distribute it back to you at the end! You’re basically getting a credit boost for an installment loan, but you’re really just saving your own money.

You don’t get a ding on your credit report for an inquiry, and it starts reporting almost immediately. I personally saw a credit boost of 50 points within the first 30 days of reporting, and 5 or 10 point raises after that. They have a few “loan” options depending on how much you can afford to save every month, and how quickly you plan to reach your savings goal. One is for as little as $25 a month.

Receive $10 FREE towards your own personal savings here!

Secured/ Unsecured Credit Card
A good starting place for credit building is getting a credit card. Secured cards or great for people with no credit history. You use your own money for a deposit, that deposit usually helps to determine your credit limit, and after 6 months of on time payments that deposit is usually returned to you.
Unsecured cards involve no deposit, but in some instances they’re harder to get approved for if you have limited or negative credit history. Different credit cards companies have different requirements and perks so if you’re going this route then just be sure to find a card that bests suits you.

Utilization %
If you choose to get a credit card to build a credit history, remember to keep your monthly utilization low. 30% is preferred for overall utilization. An even better rule of thumb is never, never ever, NEVER spend more than you can afford to pay by your due date. Of course things happen, and credit cards are good to have in emergencies, but when you’re looking to purchase a home in the future, the last thing you want to do is rack up unnecessary debt.

Know your cycle dates
Cycle dates are key when you’re looking for a credit boost. Your credit cards will be reporting to the big bosses, (the credit bureaus) after the closing of your cycle dates. Remember, your utilization should always be no more than 30% but if you want to see the most rewarding credit boosts, try to pay your cards down between 8% – 10% by your cycle date. If you don’t know your cards cycle date, don’t be afraid to ask!

Pay by your due date
Never, ever, miss a credit card payment if you can help it. This is something that will mess up all of your hard work in an instant! A good way to avoid credit card debt is to use what you can afford, a good way to avoid high interest is to pay your balance in full by your due date, and a good way to build a positive credit history is to make on time payments.

And there it is! Using these simple things will help you to start building a positive credit history. Before you know it, you’re going to see your score rising, which should help you tremendously with becoming an owner of your family home.

Check out how we managed to save a $1000 emergency fund here!

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