Buying a home is like any other investment. You cannot move forward unless you do a lot of preparation.
1) Do you have a high credit score? You need one. Scores that fall below 680 are not going to get you the better deals. You are going to either pay a higher down payment or a higher fee. Scores that are between 700-720 are good. You need to try for something in the 750 range or higher because those scores are going to offer the better price.
You should stop applying for new credit and try to pay down the old debt. Visit this link for ways to improve your score today.
2) Calculate how much you can afford to pay every month. Do you plan on using an FHA loan to help pay for your new home? Your monthly payments cannot go above 31% of your monthly income. They do not allow it. You should do some research on FHA loans if you do not know what they are or how they work. Click this link . It offers some good talking points to help get you started.
Do you want to use a conventional loan? You cannot go above 28%. You should familiarize yourself with conventional loans if that is the route you want to go. The information you find out is going to help you to better understand the deals you can make. Click here to find out more.
FYI: You can also research the types of residential loans Gilbert AZ has to offer. There are some pretty good deals. You just need to know where to look.
3) Saving for closing costs and the down payment is the most important part of the process. You are going to need between 3% and 20% of the original cost for the down payment. Look over your loan terms. Talk to your bank or mortgage lender. They can also give you some idea of how much you are going to need. You should also keep a watchful eye on your credit score because that plays a role in determining how much you pay.
4) Try to save as much money as you can. Banks or mortgage lenders do not trust candidates that live paycheck to paycheck. Do you have at least 3-5 months of payments already set aside? You are the ideal candidate they are looking for.
FYI: Some banks and lenders, in regard to the FHA loans, are going to give you some breathing room if they see you have some cash set aside. You also need money for repairs. Some of them are going to be small, while others are going to be larger. They want to see you are taking care of that.
An Example:
Charles buys a home valued at $250,000. He needs to save at least $600 a month, for additional expenses. Ted buy a home worth $350,000-400,000. He needs at least $700-800 a month to cover everything.