How to prepare to buy your first home.
Entering a hot housing market can be competitive. The earlier you prepare to buy a house, the more ahead of the game you'll be with the competition. Here are key steps you can take to improve your home-buying prospects.
Check credit history.
Pull credit reports from the Big 3 (Experian, Equifax, and TransUnion). Good scores give you a higher chance of approval with better rates and terms.
Compute your DTI.
Remember that lenders lean towards a DTI ratio no higher than 36% to 43%.
Save for a down payment.
The majority of mortgage programs require a minimum of 3% to 5%, while VA and USDA loans need 0% down.
Know your budget.
Use our online mortgage calculator to get an idea of how much home you can afford. You can also pre-qualify to get a clearer picture of where you stand in terms of approval chances.