Having a good credit score plays an integral role in helping buyers secure a competitive interest rate on your mortgage. And with the average rate for a 30 year fixed-rate mortgage hovering at 6.85 percent (up from 3.22 percent at the beginning of the year), getting a competitive rate on your mortgage is more important than ever.

Which means, as a first-time buyer, one of your main focuses should be boosting your credit.

But how, exactly, do you do that?

A recent article from realtor.com outlined tips to help first-time buyers boost their credit score—and score a better mortgage rate as a result—including:

• Pull your credit report and dispute any errors. Errors on your credit report can cause your score to plummet. But you can’t fix what you’re not aware of—so, if you’re planning to buy a home in the near future make sure to pull a copy of your credit report, review it for any mistakes, and dispute any errors directly with the reporting agencies.
• Set up automatic payments. Paying your bills on time (including credit cards and loans) is an absolute must for boosting your credit. If you’re having a hard time getting payments in on time, set up auto pay; that way, all of your payments are guaranteed to be processed on time each month.
• Increase your credit limits. Ideally, you would pay down your credit card debt before buying a home. But if that’s not feasible at the moment, you can still boost your credit score without paying down your balances. How? By increasing your credit limits. Contact your credit card companies and ask if they can increase your credit limits; increasing your limits improves your debt-to-credit ratio—which, in turn, can improve your credit score.

As a parent, you want to do everything you can to give your children the best life.

And as they enter adulthood, for some parents, that includes helping them purchase their first home.

But how, exactly, do you go about helping your child purchase a home?

A recent article from realtor.com outlined tips and strategies to help parents that want to help their kids buy real estate, including:

• Give the down payment as a gift. One of the most common ways parents help their children purchase a home is by contributing to their down payment. As a parent, you have two options for helping your child with a down payment: you can loan them the money, or gift it to them. If you loan your kid the money, they’ll be on the hook for taxes. If you gift them the money (up to $16,000 per parent), the gift is considered tax-free.
• Be a co-owner with your kid… Some lenders will also allow you to buy a home with your child and set the equity however you’d like (for example, you own 60 percent, your child owns 40 percent), which dictates how much each party takes home if and when you sell the home. This can be a good option if the goal is to eventually sell the home to your child; that way, they can eventually become the full owners of the property—and you can get back your investment.
• …or buy a house on your own and rent it to your child. If your child doesn’t qualify for a mortgage (and if you have the funds to do so), you can also purchase a home on your own—and then rent it to your child. That gives them time to build up their credit and save for a down payment—and eventually, purchase a home on their own.

As always, if you have any real estate questions or are looking for a home to purchase, please reach out! NextHome Experience would love to help you!