subject: Financing A New Home Calls For A Plan [print this page] Home ownership has been called the Great American Dream for generations. Given the current housing market, the realization of this dream may seem out of reach for many families. There are a few tricks of the trade, including planning and budgeting, that can help put a family into the home of their dreams. Potential home buyers in the greater Chicago area are fortunate to have options that can see that dream through to reality.
In general, planning for the purchase of your first home begins well before the first appointment with a real estate agent. To prepare for the process, a favorable credit rating is a good place to begin. If you have credit card balances, keeping them under 25% of the total amount of the credit line is advisable. Once you know buying your first home is in the near future, refrain from making large purchases with your credit cards.
Try to make your credit report look as good as possible. Work on paying off other debts, long standing loans such as student loans, that might make your credit look less than desirable. Take a good look at your credit history. If there are outstanding blemishes, get them resolved as quickly as possible.
For those who may find it a challenge to put down a large down payment, government programs exist to assist qualifying families. Dubbed 1st Time Home Buyers, this program sets aside federal funds that assist families who meet income guidelines with $3,000 to even $5,000 toward the down payment. Chicago first time home buyers can take advantage of this program as well because these funds are given to states and come from the Federal Housing Authority. The funding is on-going and capable of helping many families get a mortgage for a home.
As simple as it may sound, sitting down at the kitchen table with a list of bills and a calculator is another essential step to making the dream for first time home ownership come true. Understanding just how much home you can afford serves two purposes. For one, it gives prospective homeowners a place to start when they begin their hunt for a new home. A good grasp on financial planning ensures the homeowner will be prepared for the expenses that go along with the purchase of a new home.
Secondly, knowing what type of payment will work within the monthly budget can help narrow down the type of loan that will be the best fit. Potential 1st time home buyers would do well to consult with a mortgage specialist early in their search for a new home. Other programs exist as well, some that give special funding for veterans, teachers, nurses and others. Some programs may even help specific families find their way into home ownership for 0% down, so get started by talking to a qualified lender as soon as possible.
