The 4 Step Process to Buying and Keeping a Home
June 25, 2012
By Katie Bryan, America Saves communications manager
Almost anyone can afford to own a home with proper preparation. Develop a savings plan to build up money for a down payment at purchase, for moving expenses, and for post-purchase emergency expenditures such as needed home repairs. Remember, the larger your down payment, the lower your home loan payment.
1. Prepare Yourself for Homeownership Financially
America Saves can help you develop a plan with regular monthly deposits in a bank or credit union account. At the same time, reduce your credit card debt and other debts in order to increase your ability to afford a house. Lowering these debts will increase your credit score and your chances of getting a lower-interest loan.
2. Get Qualified for a Home Loan Before you Look for a House, Condo, or Co-op
That will give you some idea of whether you can afford to purchase a home and, if you can, at what price. Make certain you contact at least three lenders, including your primary financial institution. This will help ensure that you get the least expensive loan for which you can qualify. Be especially skeptical of uninvited loan offers you receive through the mail, by telephone, or at your doorstep.
3. Make Home Loan Payments on Time
Making home loan payments on time will help you build wealth and avoid costly penalty fees. If payments are missed, you could lose your home through foreclosure. To help ensure that you can afford timely payments, maintain an emergency fund you can dip into when needed. There should be enough money in this account to pay for needed home repairs as well as emergency expenditures.
4. If You Have Difficulty Making Payments Seek Help
Don't wait until you miss a loan payment to look for help. Seek assistance as soon as you are aware that you might have difficulty making payments on time. Contact your lender, keeping in mind that all reputable lenders want you to succeed as a homeowner. Your lender will appreciate your call and should work with you to solve any problems. You can also get free advice from a housing expert. HUD-approved housing counselors will work with you and your mortgage company on your behalf. Call 888-995-HOPE (4673) to speak with an expert about your individual situation.
There may also be federal and local assistance programs available to help you. The Department of the Treasury & Housing and Urban Development created the Making Home Affordable Program to help homeowners avoid foreclosure.
Saving for a large purchase? Here are other articles you may enjoy:
- Saving For a Ring: Why You Should Save as a Couple
- How To Save For a Large Purchase: Remember the SMART Rule
- 6 Simple Tips to Save for a Large Purchase
- 3 Tips for Saving for Your Next Ride
- Saving for the Big Things
- New Theme: Saving for a Large Purchase
- Saving for Your Future May Be Easier Than You Think
Are you ready to commit to a savings goal? Join America Saves today.