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If buying a home fills you with anxiety and fear, you’re not alone. A new home is one of the biggest purchases you will ever make.

I remember when my wife and started the home buying process. We had no idea where to start. We looked at every home within a 15-mile radius. After a rigorous search and driving every realtor in town crazy, we finally purchased our first home.

Looking back, having more guidance would have made the process less stressful and a lot more enjoyable. Getting started can sometimes be the hardest part of any process. So, if you need a little jump-start, here’s how you can prepare for your new purchase:

Obtain a copy of your credit report

Your credit report plays a large role in receiving the best interest rate on your mortgage. Lenders want to be sure you are not a high-risk when lending you funds to purchase your home. Your credit report demonstrates your ability to manage your debt.

This may seem like an unlikely first step, however; credit repair and improvement can be a slow process. The credit bureaus move very slowly when disputing discrepancies. It is best to understand your credit report as early as possible; improvements in credit score could save you thousands of dollars over the life of the loan.

Sign up for credit monitoring

Unlike auto loans and credit cards, personal loans mortgage lenders pull all three of your scores. I have found the most comprehensive monitoring service available is myFICO. By monitoring all three of your scores you can make sure no errors are reported and all information is correct. If there are discrepancies you will need to contact the specific credit bureau immediately.

Know your debt-to-income ratio

Another number lenders will look at is your debt-to-income ratio. This is the combination of all your expenses and your monthly pre-taxed income. Anything below 36% if considered “workable”. Calculate your ratio and determine if you need to lower your percentage.

Get organized

It’s easy to forget to print documents when you’re doing your banking or taxes online. However, when you apply for your mortgage, the lender will likely require a significant amount of paper documents for review. These documents can include:

• W-2’s or 1099s
• Tax returns
• List of debts
• List of assets
• All account bank statements
• Profit and loss statements if you are self-employed
• Paycheck stubs
• And more…

The more organized you are the easier this process will be. Try creating a filing system to keep all of your documents. Organize each document depending on the category.

Then every month, print a copy of your statements and put them in a folder for the mortgage lender. I also like to save a PDF version of important documents on a password protected USB flash drive on my key ring. If you’re ever meeting with a lender and need the documents it can be handy to have.

Note: If you have frozen your credit, make sure you wrote down your pin and any answers to security questions.

Find a Good Realtor

“The commission from the sale of the home comes out of the seller’s proceeds so, there is no reason for a buyer to not get representation”, says Mike Hrubos, founder of The Avalon Life.

Mike adds, “ a good realtor can help buyers save money by, negotiating, knowing the market precisely and not backing down”. Realtors can also show you neighborhoods that may represent a good value and mimic the lifestyle you desire.

Ask your friends and family for referrals. There are hundreds of realtors, it is important to find one that can understand your wants and needs.

Join the Down Payment Movement

Saving any amount of money can be challenging, let alone a down payment for a house. Lenders prefer a down payment of 20% of the purchase price of your home. But not to worry, there is a group of people that are willing to support you with your efforts. Join the Down Payment Movement and receive a 12-week home buying course in your mailbox every week. You will pledge a savings amount and be encouraged by a community with a similar goal.

Saving for your first home doesn’t have to be daunting when you have a group of people rooting for you.

Purchasing your first home doesn’t have to be stressful or leave you feeling anxious. Get organized, know your credit score, and surround yourself with a community of people who have a similar goal. In no time you will realize your dream of buying a home.

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