<p>With mortgage rates fluctuating, now might not seem like the perfect time to buy a home, but it’s an ideal time to prepare, especially for first-time homebuyers. </p><p><a href="https://movement.com/faith?_branch_match_id=1354437665083707365&amp;utm_medium=faithfi&amp;_branch_referrer=H4sIAAAAAAAAA8soKSkottLXL8ozMsnWSywo0MvJzMvWz80vS81NzSuxrytKTUstKsrMS49PKsovL04tsnXOKMrPTQUAaZFz8zkAAAA%3D">Movement Mortgage</a> recently shared helpful tips on <a href="http://faithfi.com">FaithFi.com</a> for those looking to enter the housing market. Here’s a breakdown of these critical steps to set you up for a successful and financially wise home purchase.</p><h3>Step 1: Determine Your Budget—And Keep It Conservative</h3><p>First things first, know what you can afford. It’s wise to set a sale price and monthly payment that’s <i>less</i> than the maximum a lender or loan calculator may suggest. Keeping a buffer in your budget allows for unexpected costs and helps you avoid financial strain. </p><p>As Proverbs 21:20 says, <i>“Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.”</i></p><h3>Step 2: Set a Savings Goal for Your Down Payment</h3><p>While a 20% down payment isn’t always required, it has some major benefits:</p><ul><li>Reduces the loan amount</li><li>Eliminates private mortgage insurance (PMI)</li><li>It gives you enough equity to sell if unforeseen circumstances arise</li></ul><p>If you can’t reach 20%, aim to save as close as possible for these advantages.</p><h3>Step 3: Budget for Additional Costs</h3><p>Beyond the down payment, remember incidental costs, like:</p><ul><li>Property and pest inspections</li><li>Moving expenses</li><li>Essential appliances (like a fridge or washer/dryer), if not provided by the seller</li></ul><p>Planning for these helps avoid last-minute financial surprises.</p><h3>Step 4: Check Your Credit</h3><p>Most mortgage lenders prefer a credit score between 700 and 750, with 740+ often unlocking the best rates. Here’s how to optimize your score:</p><ul><li>Review your credit report and dispute any errors</li><li>Pay down debts to keep balances below 30% of your available credit</li><li>Avoid any new credit inquiries, as “hard pulls” can impact your score</li></ul><h3>Step 5: Lower Your Debt-to-Income (DTI) Ratio</h3><p>Even with a great credit score, high debt levels could result in a mortgage denial. Try to reduce any debt you can, like paying off a car loan, to improve your DTI ratio and increase your mortgage eligibility.</p><h3>Step 6: Maintain a Clear Paper Trail</h3><p>Lenders will closely scrutinize your transaction history, so avoid moving money between accounts for at least three months before applying. Any large transfers could complicate the process, as lenders must verify that your assets are not borrowed. </p><p>If you’re expecting a cash gift, consult a loan officer for guidance. Specific documentation may be needed to confirm that the money is a gift, not a loan.</p><h3>Step 7: Pay Off Outstanding Tax Debts</h3><p>If you owe back taxes and are on a payment plan, prioritize paying these off. Outstanding tax debts affect your DTI ratio and could lead to complications with lenders, as tax liens can take priority over other debts.</p><h3>Step 8: Stay at Your Job</h3><p>Lenders look for employment stability, so if you’re considering a job change, it’s best to hold off until after you buy the home. Having at least two years at your current job can reassure lenders and improve your chances of securing a mortgage.</p><h3>Need More Help? Connect with Movement Mortgage</h3><p>Movement Mortgage offers guidance for each step of the home-buying process, helping you make informed financial decisions. Additionally, they’re a faith-based company dedicated to philanthropic causes, having donated $377 million to educational and infrastructure projects in underserved communities. </p><p>To learn more, visit <a href="https://movement.com/faith">Movement.com/faith</a>.</p><p>These steps can help you confidently prepare for your first home purchase, ensuring you’re financially and practically ready when the time comes.</p><h3>On Today’s Program, Rob Answers Listener Questions:</h3><ul><li>I would appreciate your thoughts on tithing from my portfolio gains or income.</li><li>Can you borrow from a long-term health insurance policy?</li><li>I have $10,000 in a CD and am trying to decide whether to use it to pay down my debt.</li></ul><h3>Resources Mentioned:</h3><ul><li><a href="https://movement.com/faith?_branch_match_id=1354437665083707365&amp;utm_medium=faithfi&amp;_branch_referrer=H4sIAAAAAAAAA8soKSkottLXL8ozMsnWSywo0MvJzMvWz80vS81NzSuxrytKTUstKsrMS49PKsovL04tsnXOKMrPTQUAaZFz8zkAAAA%3D">Movement Mortgage</a></li><li><a href="https://www.ncfgiving.com/">National Christian Foundation (NCF)</a></li><li><a href="https://christiancreditcounselors.org/FaithFi/?%24web_only=true&amp;_branch_match_id=1354437665083707365&amp;utm_medium=moneywise&amp;_branch_referrer=H4sIAAAAAAAAAwXBQQqAMAwEwB81IJ4E8eBDpNZoQ2taNhFvvt2Z7N5tIoIOYwmx91BFCzGlDDGXqAl8iKf2qHFtsOUDnwyIXtuO9hpjXjPazT%2BMgBPcTAAAAA%3D%3D">Christian Credit Counselors</a></li><li><a href="https://chministries.org/info-pack/?hsCtaTracking=a1d865ee-68d9-42ca-af69-b1d362723b82%7Caea8c871-b92e-4d02-a4fd-f8deb79957c4&amp;utm_campaign=spsr_faithfi&amp;utm_source=faithfi&amp;utm_medium=faithfi_partner_landing_page_info_pack_button_chm_info_pack&amp;utm_content=info_pack">Christian Healthcare Ministries (CHM)</a></li><li><a href="https://www.faithfi.com/sparrows">Look At The Sparrows: A 21-Day Devotional on Financial Fear and Anxiety</a></li><li><a href="https://www.faithfi.com/rtg">Rich Toward God: A Study on the Parable of the Rich Fool</a></li><li><a href="https://www.faithfi.com/find">Find a Certified Kingdom Advisor (CKA) or Certified Christian Financial Counselor (CertCFC)</a></li><li><a href="https://www.faithfi.com/manage">FaithFi App</a></li></ul>
<p><p>Remember, you can call in to ask your questions most days at (800) 525-7000. Faith &amp; Finance is also available on the <a href="https://www.moodyradio.org/programs/faith-and-finance/">Moody Radio Network </a>and <a href="https://afr.net/podcasts/faith-finance/">American Family Radio</a>. Visit our website at <a href="https://www.faithfi.com/">FaithFi.com </a>where you can join the FaithFi Community <a href="https://www.faithfi.com/give">and give </a>as we expand our outreach.</p></p>

FaithFi

Faith & Finance is a daily radio ministry hosted by Rob West. The program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

Faith & Finance with Rob West

With mortgage rates fluctuating, now might not seem like the perfect time to buy a home, but it’s an ideal time to prepare, especially for first-time homebuyers. 

Movement Mortgage recently shared helpful tips on FaithFi.com for those looking to enter the housing market. Here’s a breakdown of these critical steps to set you up for a successful and financially wise home purchase.

How to Prepare for Your First Home Purchase

FaithFi: Faith & Finance | Nov 22, 2024

Show Notes

Where Faith Meets Finance

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