Buying a home is one of the biggest financial decisions you could make. That means you need to prepare before doing it, but it’s hard to know what steps to take. In this post, we’ll answer your questions about preparing to buy a home and empower you to shop with confidence.

 Q: How do credit scores affect buying a house?

 A: Your credit score is important because lenders use it to judge your loan application and determine your interest rate. Higher scores increase your chances of approval and lower your interest rate. Aim for a minimum score of 640 if you’re going to buy a home.

 Q: What about down payments?

 A: When buying a home, you’ll want to save money for a down payment. This is how much you pay out-of-pocket before your lender covers the rest. Common down payment amounts are 5%, 10% and even 20%.

 These percentages are the portion of the home’s price you pay. For example, a 10% down payment on a $350,000 home would be $35,000 out-of-pocket. Making a larger down payment will lower your loan amount (which lowers your monthly payment).

 Q: How do I pay closing costs?

 A: Closing costs may come out-of-pocket as well, which means you need to factor them into how much you’re saving. These costs usually range from 3% to 6% of your loan amount. So, 3% closing costs on a $315,000 loan would be $9,450.

 Q: What should I look for in a lender?

 A: Most importantly, you should look for a lender you know and trust. You’ll depend on them to guide you through the process, have good communication and tell you what is or isn’t affordable.

Other things to look for are:

·         Multiple types of loans offered

·         Competitive rates

·         Flexible down payment programs

·         Online applications

 If you’re already at the stage where you’re looking for a lender like this, Allied can help. Find a financially secure way to buy a home when you apply for a mortgage today!