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Your first home: Professional tips to start buying your first home

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Did you know that 82% of people who bought a home for the first time in 2020 did it at the age of between 22 and 30 years? If you are in this age range and you are thinking of purchasing a property for the first time, you are at the perfect time to find out what the first steps you should take are.

Buying your first home is one of the most important financial decisions you can make, and that is why it is important to identify the correct steps before applying for a mortgage loan or giving a down payment on your first home: Discover the most pro tips from the experts!

How do you know if you are ready to buy a house?

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One of the first tips you’ll hear from experts to determine if you’re ready to buy your first home has to do with your financial stability; it is not necessarily about not having debts, or reducing expenses as much as possible, but to have at least 20% of your total income to allocate it to the payment of a mortgage for a period of between 15 and 30 years.

Any figure above this percentage could mean a negative impact on your finances and force you to modify your current lifestyle, sacrificing some expenses and even putting your assets, investments or the possibility of saving for retirement in the way you have contemplated at risk.

Explore First Time Buyer Programs

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Institutions specialized in mortgage loans, such as Rocket Mortgage, offer an extensive section of resources for first-time buyers, in which you can explore financial aid for the payment of advances, closing fees and other special programs to help first-time buyers who work in areas such as education and emergency services.

One of the advantages of requesting information through the official channels of Rocket Mortgage is that you will be able to contact an experienced advisor, who will guide you through the entire process and will know how to give you the information that best suits your current and future financial needs.

Avoid financing before applying for your mortgage

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If you have made the decision to buy a house in the short or medium term, the ideal is to start a process of organizing your finances and determine which expenses you can continue to sustain and which ones you should cut. The purpose of this is to allocate your resources towards the payment of a mortgage and an advance, but also to maintain a credit score that opens the doors to better loans.

Remember that the purchase of a house represents one of the most important expenses that you will make in your life, for this reason, experts recommend avoiding large or long-term personal loans before buying a house, since in case of having difficulties to pay your personal loan you would face a potential decrease in your credit score.

Improve your credit score

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If your plan is to buy a house in the medium term, you are at the ideal time to make the right financial decisions, and this includes improving your credit score. Remember that, depending on the mortgage you wish to access, they could request a credit score between 670 and 739 points.

To improve your credit score, you have the option of requesting a prepaid or secured credit card, avoiding delays in your monthly payments on credit cards or utilities, or, in some cases, requesting clarifications in order to increase your credit score in case there is an error in your reports.

Compare the mortgages to which you will have access

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The mortgages to which you will have access will depend on your interests and your financial situation; In this step, you should consider the period in which you will be able to complete the mortgage payment and the main categories in which they fall, such as VA, USDA and FHA loans.

Another option is conventional mortgages, which are not linked to the government. In general terms, most of the available mortgages offer the opportunity to make down payments from 3% the total value of the house you want to buy. In the case of veterans aid, no down payment is required.

Set a budget

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If you have an excellent credit score, it is likely that financial institutions will offer you a higher mortgage than you had contemplated for the purchase of a house, but experts recommend establishing a budget that fits your current and future financial needs, contemplating the expenses associated with your lifestyle.

A tip from the experts is to consider the size and conditions of the house you want to buy, in addition to following the 28% rule in which it is recommended that the monthly payment of a mortgage should represent a maximum of 28% of the monthly income of the person who is paying it.

Contact a real estate agent

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Finding the best home for you starts with contacting a real estate agent who has extensive experience, good references and expert knowledge about the area in which you are considering buying your first property, as he will help you find the best options taking into account your needs, budget and future plans.

With these steps, you will be prepared to properly follow the process of buying your first home, a decision that, according to experts, should be completed avoiding impulsive decisions that put your long-term financial health at risk.

Refinancing may cause finance charges to be higher over the life of the loan.

Rocket Mortgage, LLC; NMLS #3030; www.NMLSConsumerAccess.org. Equal Housing Lender. Licensed in 50 states. AL License No. MC 20979, Control No. 100152352. AR, TX: 1050 Woodward Ave., Detroit, MI 48226-1906, (888) 474-0404; AZ: 1 N. Central Ave., Ste. 2000, Phoenix, AZ 85004, Mortgage Banker License #BK-0902939; CA: Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act; CO: Regulated by the Division of Real Estate; GA: Residential Mortgage Licensee #11704; IL: Residential Mortgage Licensee #4127 – Dept. of Financial and Professional Regulation; KS: Licensed Mortgage Company MC.0025309; MA: Mortgage Lender License #ML 3030; ME: Supervised Lender License; MN: Not an offer for a rate lock agreement; MS: Licensed by the MS Dept. of Banking and Consumer Finance; NH: Licensed by the NH Banking Dept., #6743MB; NV: License #626; NJ: New Jersey – Rocket Mortgage, LLC, 1050 Woodward Ave., Detroit, MI 48226, (888) 474-0404, Licensed by the N.J. Department of Banking and Insurance.; NY: Rocket Mortgage, LLC, 1050 Woodward Ave., Detroit, MI 48226 Licensed Mortgage Banker-NYS Department of Financial Services; OH: MB 850076; OR: License #ML-1387; PA: Licensed by the Dept. of Banking –​ License #21430; RI: Licensed Lender; WA: Consumer Loan Company License CL-3030. ​Conditions may apply.

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