Home Buying Finance Guide

 Hurd & Honey

Hurd & Honey

While it may be overwhelming to think about purchasing your first home, it's doesn't have to intimidate you. Start with your credit score, eliminate excess debt, and prequalify to see what you can afford. 

*Sometimes the bank will qualify you for a higher loan than you can actually afford, be sure to assess your budget before purchasing a home at the top of your budget. 

 The Penny Hoarder

The Penny Hoarder

The first question you may have is, what is a good credit score, or, is my credit any good? This is hard to know if you have never looked at your own credit score. There are many ways to begin learning about credit, and your personal score. We use Credit Karma to keep track of our scores, and it's also a wonderful resource for finding credit cards and loans, which can also help raise your credit score (if you're wise). 

Credit is not a topic that I love, and I do find myself feeling annoyed at the game that it is. Regardless, the higher your credit score, the more loans you'll quality for, and the better loans too. It's always better to improve your credit before mortgaging a home, as your credit score will affect your interest rate. 

 The Penny Hoarder

The Penny Hoarder

There are several resources that can be found online to help you eliminate credit card debt and improve your credit score. Look for a plan that can help you. We currently use a plan that helps us put aside excess money each month. Sometimes we apply it to debt, and other times we use it to make a purchase for our business. Each week we transfer a specific amount to our savings, leaving us with around $10,000 at the end of year.

  • Week 1 - $125.00 

  • Week 2 - $150.00

  • Week 3 - 175.00

  • Week 4 - $300.00

We repeat the pattern over and over again, every Monday. This savings is accumulated in addition to our regular monthly savings. 

Once credit card debt is lessened and your credit score increases, and you have been pre-qualified, you can begin to think about how you save for a down payment. Keep in mind that there are several types of loans out there, and not all loans require a down payment. 

The standard type of down payment is 5% of the total cost of the home. But, having 20% to put towards a down payment is typically best. 

 Thrift Diving

Thrift Diving

Once you're saving for a down payment, and you're almost ready to buy, you will have time to investigate all of the exciting points of buying a home, like taxes.

Keep in mind that normal VAT or taxes are different when buying a home, and you'll want to familiarize yourself with all of the taxes required. Various counties and cities have various property tax rates, and while some states don't require state income tax, they may require much higher property taxes. 

Purchasing a home is possible: grow your credit score, eliminate your personal debt, save for a down payment, and educate your family and you about all of the expenses involved with purchasing a home. 

*This is a collaborative post.

 Hurd & Honey

Hurd & Honey