In the Market for a New Home? Do These 2 Things to Prepare

Read on to learn 2 important things you should do before buying a home.

by: Adam McFadden | Updated February 16, 2022
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So you’re thinking of buying a new home? Congratulations! While you’re understandably focused on how many bedrooms you need, if that kitchen layout works for you, and if you should pick the bigger backyard or the shorter commute, it can be easy to forget about the details on the finance side. And doing so can cost you thousands of dollars, both at the time of purchase and down the road.

Here’s what you need to do now to make sure you’re ready to act fast when that perfect place comes along.

Save For Your Down Payment

Depending on the type of loan you are using, you will generally need at least 3% for a down payment. On a $200,000 home, that’s $6,000 in down payment funds which is no small chunk of change. The new trend in goal-based banking can help you reach your savings goals faster. With Monifi, you have the power to set your goals and save however you like. Their easy-to-use app allows you to create goals and transfer money whenever you need it. You’ll even earn interest on your savings balance helping you reach your goals faster

You’ll first need to set up a Spend Account which currently has a limited-time $250 bonus when you set up payroll direct deposit and receive at least two direct deposits of $1,000 or more. That’s $250 you can transfer to the Save Balance towards your down payment savings goal. To make it even better, your relationship with Monifi is free. There are no minimum balance fees, no monthly maintenance fees and no ATM fees when you use ATMs within the Allpoint™ Network.

Earn $250 with Monifi.

Bulk Up Your Credit Score

Now it’s time to focus on your credit. Your credit score is an important factor in getting a mortgage and determining the type of loan you’ll qualify for. You generally need a credit score of at least 620 to qualify for a conventional loan, although the higher your score, the better your rate will be.

The last thing you want is to find out from your lender there’s a problem with your credit so it’s important to know ahead of time how things are looking and if you have work to do in order to improve your score. You’ll also want to keep tabs on things throughout your entire homebuying journey. Using a service like helps in all of these areas. can help you be better at credit by recognizing what’s hurting your score. You can check your FICO® credit score when you sign up for a 7-day trial for just $1. Credit monitoring continuously watches for changes and suspicious activity on your three credit reports from TransUnion, Experian and Equifax.

Check your score now and see where you can improve.

Lower Your Debt-To-Income Ratio

An important factor that can affect the price of the home you qualify to buy is your debt-to-income ratio. To calculate this, divide your total monthly payment liabilities (think credit cards, auto loans, student loans, etc.), along with your estimated mortgage payment, by your monthly gross income (divide your annual salary by 12). So, if your monthly income is $5,000 and your monthly expenses are $1,000, your debt-to-income ratio is 20%.

A debt-to-income ratio of less than 43% is a good number to aim for because it’s the highest ratio a borrower can have and still get approved for a qualified mortgage, according to the Consumer Financial Protection Bureau.

If your debt-to-income ratio needs some work, credit card debt is usually one of the easiest and fastest types of debt to eliminate. If you’ve incurred credit card debt, an app called Bright can help you eliminate that debt up to two times faster by using their patented system called MoneyScience™. It creates an AI-driven financial plan that pays off your credit cards and improves your credit score automatically. The average user saves $744 each year in credit card interest charges. Here’s how it works: Download the app, then scan and link your accounts. Set your goals and Bright starts working towards them. Bright currently offers a 10-day free trial so you can check it out risk-free.

Start lowering your debt-to-income ratio now.

Do you have house buying tips for fellow readers? Email us at and share your story. We may even choose to highlight it in a future article. Nicole Spector and Adam McFadden contributed to the reporting for this article.