3 Hot Tips to Help Make Buying Your Dream Home Come True

Today, buying their dream home, for many people, seems to be a goal that is harder and harder to reach. The biggest obstacles most give for not being able to do, far more frequently than any other reason, is the difficulty they face trying to save up enough money for their down payment. There always seems to be something that comes up and stops you from putting money into your “buy our dream home fund.”

Next on the list is poor credit scores, which many labor under the concept that they need a full 20% or more to buy and that they must have a credit score in excess of a 700 to secure a mortgage. While the reality is that you can buy a house with less than 5% for a down payment and with credit scores under 640. Here are three things you can do to ensure you are ready to buy your dream home.

1. Auto Payments to Your Savings Account

For many of us, trying to put money in savings each payday manually can be challenging. There is always something that seems to eat up your money before any of it makes its way into your savings account. The less money that gets funneled into your savings, the longer it is going to take you to reach the goal you have set for your down payment. Whether you have direct deposit and split a percentage of your pay to be automatically deposited in your saving account or you have your bank do so. Because you never actually “see” this money, you are less likely to miss it, and your savings account is going to grow more quickly.

2. Create a Good Credit Record and Keep It That Way

One of the things most mortgage lenders look for when they pull your credit report (more than the score), is your payment history. If you have a lower credit score from a previous credit issue, but your payments have been kept current for an extended period, this will show the lender you have become more stable and responsible. In which case they will also see that your credit score has been slowly recovering, yet another important detail lenders consider. Keep making your payments on time and try to keep your credit balance less than 30% of that which is available to you.

3. Try Living On a Budget

If you are serious about buying a home, you can start by creating a budget that cuts down on your current bill load. Use the extra money living on a budget can be put towards paying down your current bills. Try cutting back on things like going out for meals, buying a new car when your current one is still serviceable, or instead of going on a vacation, consider a stay-cation instead. The more you are willing to cut back on your current spending habits, the more you can funnel into your rapidly growing “buy our dream home fund.”