Thinking of buying a house? Not sure what to do first? You’re not alone. It can be confusing. One of the first things you should do is check your credit. Everyone can check their credit report once a year, for free, at AnnualCreditReport.com. Check your report thoroughly for mistakes or errors. If you find any mistakes, check with the credit bureaus on how to dispute mistakes on your report. If you have issues with your credit, work on cleaning it up. You don’t need to have perfect credit, but you need a solid credit score. The score you need will vary slightly from lender to lender and also based on the type of loan you are applying for. FHA loans, for example, may allow a lower score than a conventional loan.  Typically, a score around 620/640 or more could qualify you for loan, if you meet the other criteria.  If you have a large amount of debt on credit cards and charge cards, work on paying down your debt. How much debt you have is just as important as your credit. Lenders use a formula called Debt Ratio to determine how much you can afford in monthly house payments. This Ratio is 36%-42% of your monthly income. Usually, the better your credit and higher your down payment, the higher on the scale they will place you. So, for example, if you make $3500 per month, and have a debt ratio applied of 38%, then you will have a debt allowance of $1330 per month. But, remember this takes into account all your other monthly debts also. So, if you have $500 a month in other debt, then you subtract that from your allowance $1330-$500, leaves you $830 toward your mortgage. Last, it is important to have savings for down payment and miscellaneous cost such as appraisals and inspections. There are a few loans that offer 0% down, such as VA Loans, but most of the time you will need 3% -20% down. When you feel your ready, talk to your lender about getting pre-qualified or better yet, pre-approved. Your lender will be able to help walk you through the process and give you an idea of where you stand. For more information on this topic or information on Buying or Selling a home. Visit us at www.SouthernILHome.com.