Five Important Steps to Buying Your First Home

With the First Time Home Buyer Tax Credit extended, more and more people are looking to buy a home right now. However, owning a home is not something you want to rush into, and you need to know what you're getting into and how to approach it in order to make a responsible decision.

The key to the entire process is to ask questions. Lots and lots of questions. And, there is NO STUPID QUESTION.

Here are 5 important steps to buying your first home:

1. Get your Finances in order - Check your credit score, taxes and all other aspects of your finances to figure out the max you can afford with monthly mortgages, utilities, taxes, maintenance and insurance. A bad credit score can affect what rates you sign on a mortgage...or prevent you from getting one altogether.

It helps to go ahead and get pre-approved by a lender. That lets the seller know financing is already lined up.

2. Find a Realtor and start looking - Often the best way to choose a realtor is through a referral from a friend or family member. Make sure they have experience with the area you're interested in and are good negotiators. Make a list of pros and cons of things you must have in a house and prioritize it. Consider location and convenience to church or shopping or schools.

3. Investigate the reputations of builders & condos - Check out their financial health and get info from the Better Business Bureau.

4. Make an offer and apply for a mortgage - Buyers are generally in the driver's seat these days. Have enough cash for a down payment, which can be a minimum of 10% and extra funds for closing costs, sppraisals and move-in deposit. Definitely do an inspection.

5. Prepare for closing - Secure homeowners insurance. Have a financing contingency to get you out of your contract without penalty if your loan doesn't go through. Have certified funds ready, a cashier's check instead of a regular check.

Buying a home is a wonderful milestone, but also a big responsibility. Do your research and prepare in advance. Most our clients are going through this process and cleaning up their credit in advance. United Credit Source wants to help you through the important times in your life and prepare you for your future!

5 key steps to buying your first home, tax credit or no.

The Ingredients of a FICO Score

FICO is an independent company from the 3 credit bureaus, TransUnion, Experian & Equifax.

They developed the algorithm that 90% of the largest banks in the United States use.

Your FICO score is used to determin mortgage rates, car rates and credit car terms.

The FICO credit scores range from 350-850. Scores below 600 are considered high risk borrowers. 690 and above is considered excellent. How are the scores decided? They are based on your payment history, outstanding debts, credit history, new credit & credit in use on your credit report.

Here's how it's broken down:

35% of your score is calculated from your payment history. Paying on time makes a big difference!

30% is based on the amount of debt your carrying currently. Paying balances down can make a big difference!

15% is based on the length of your payment history. The longer you've been around, the better. If you're new, you can be risky.

10% is based on any recent inquiries. Don't go around having your credit pulled by every auto dealer, credit card company out there. It adds up.

10% is based on your credit mix variation. It's good to have different kinds of credit, such a credit card, a car payment and a student loan.

Now, we still don't know FICO's secret algorithm, but we have an idea of the ingredients.

Pay attention to all aspects of your credit.

Pull a consumer credit report regularly without any affect to your scores,

and United Credit Source can help you clean up any inaccurate or deliquent info on your credit report.

Take control of your financial future!

Budgeting on an Irregular Income

Creating a Budget when you have an irregular income can be intimidating, but you still need to do it. You'll feel so much better about your finances if you take the time to plan things out and take control of what you can.

First you need to figure out exactly how much money you need each month to get by. The basics. This includes food, utilities, your home and transportation. This does not include entertainment and extras.

Then you need to list items in order of importance. The most important first, the next important, and so forth. Dave Ramsey, the financial guru, has several budgeting forms you can download for free to help with this process.

When you receive your paycheck, spread this money out through your budget, starting with the first item and working your way down the list. It may not cover everything, but just try to pay as much as possible. Then, when your next paycheck arrives, continue on the list from where you left off, paying bills.

It might take a little trial and error to figure it out and make it work well, but it's worth figuring it out and taking control of your finances. United Credit Source wants to help you achieve financial control. We'll help you figure out which debt to pay down, how to take control of your credit scores and clean up those negative, inaccurate accounts on your credit report. We will educate you so that you won't find yourself trapped by your finances.