Credit score: Lenders are generally looking for buyers to have credit scores of at least 620 nowadays. Although the Federal Housing Administration will extend loans to borrowers with credit scores as low as 580, most banks are imposing higher scores. Check your credit score and make sure all inaccuracies are cleared and fixed before applying for a loan. The higher the credit score the lower the interest rate.
Reserves: Even when renting, financial advisers recommend saving four to five months’ worth of expenses in case of job loss or any other unforeseen event. Homeowners should add an additional two months’ worth to their savings. A home needs maintenance so this is vital to avoid unexpected repairs.
Settling down: Buyers should think about if they see themselves living in the same place for five to seven years. Homeownership is not just a financial decision, it’s also a lifestyle choice. Make sure that the area will support your lifestyle.