You’ve probably heard that the keys to success are perseverance and determination. Well, that’s a lie. The real key to success is a great credit score – at least in the real estate market. A credit score, among other criteria, determines whether you’re eligible for a loan and the interest rate you will pay once you are approved. Think of it like this: A great credit score gets you a first-class seat toward the home of your dreams, while poor or no credit gets you a seat in the tail of the plane next to the stinky bathrooms. So if Mom and Dad are still paying your phone bill, it might be time to take on that responsibility to build some credit. If you do have credit and it’s low, that’s OK too, since you can easily work on improving it before applying for a loan. Make sure you check your credit score often to see where you stand.
Even if you plan on getting a loan for your dream house, you’ll still have to get financially ready for this big investment. Down payments worth 20 percent of the home sale price are generally required upfront. Unless you’re organizing a bank heist, which we don’t recommend, start saving now. Additionally, prepare all of your documentation including tax returns, driving records and proof of income. Banks use this information to verify your trustworthiness and make sure you won’t be running off into the sunset with their money. For more valuable tips on getting the funding for your home, watch our video!