When you are hunting for your dream home and you finally find the one you want to purchase it as soon as possible. You wouldn’t want anyone else swooping in and getting your home. Having financial tools at your disposal can equip you to get the home you want. Making a smart and informed decision will set you up for success in the future. There a few financial tools that you need to have to make the home buying experience go smoothly.

Have A Sufficient Down Payment

If you do not have the necessary cash to put towards the home of your dreams, then those dreams might not become your reality. Since the housing crisis of 2008 many banks have become strict when it comes to the amount you need to qualify. As a result most loan programs require a minimum of 3.5% down so that a borrower has some skin in the game. Gone are the days where you could get a home with zero down. The more you can save up towards a down payment the better. This will enable you to have to borrow less and pay less total interest.

Make Sure Your Credit Score Is Sufficient

Having a good FICO score will enable you to borrow the money you need to get the home you are after. If your credit score is lower than a lenders required amount, you will be less likely to get the loan to purchase the home. The higher the score you have the less you will have to pay in interest as well. This saves additional money throughout the life of the mortgage. There are a few simple ways to improve your score that increase your ability to get the required funds. Making sure you are not maxing out your credit cards is one way to get that score up. Banks aren’t fond of individuals who live on credit cards as they could be a potential liability. Also, make sure that you do not miss payments or are late. This two mistakes can end up heavily impacting your score and reduce the chance of you getting that dream home.

Be Aware of Closing Costs

As a borrower you are responsible for the appraisal, credit report, attorneys/ closing agent fees, recording fees, and underwriting fees. This can come out to approximately 1%-3% of the loan amount. The lender will give you a “good faith” estimate of what you responsible for when you finally close. Stringent rules are applied to this estimate so once you have one it will be close to the amount you will be paying. Be sure to inquire about specifics and each individual cost so that you won’t be unsure of anything.

Equipping yourself with the necessary financial tools is paramount to success in owning a house. Closing on your dream home takes time, patience, and quality information. By learning about your down payment, credit score, and closing costs, you will be one step closer to the reality of owning a home.