Buying Your First Home Is A Big Decision

Buying Your First Home Is A Big Decision



Buying Your First Home is​ a​ Big Decision
Buying a​ home is​ one of​ the greatest investments you will ever make .​
The best -- and least stressful -- way to​ purchase a​ home is​ to​ be well educated throughout the process.
Before you even start looking for a​ house to​ buy, you need to​ review your financial situation .​
This will let you know how much of​ a​ down payment you can afford and how large a​ monthly mortgage payment you can handle .​
Lenders will look at​ the ration of​ how much you make to​ how much you owe .​
Most will require that your monthly housing costs remain under 28% of​ your total monthly income and that your total debt is​ less than 36% of​ your monthly income.
But you should look at​ what fits into your budget, not what the lender says you can afford .​
If you are currently making a​ rent payment of​ $1200 a​ month and barely getting by, how could you expect a​ mortgage of​ that size with the added insurance and maintenance costs of​ owning a​ home? You have to​ go with what works for your budget and finances .​
Remember, you can always work your way up to​ a​ larger home over time.
Once you have determined how much home you can afford, you need to​ check on your credit report and score .​
Lenders will rely heavily on your credit score when deciding whether or​ not to​ lend to​ you .​
It will also help decide how much interest you will pay .​
Your credit score is​ determined by the information in​ your credit file .​
If something is​ incorrect, your score will be affected.
Your score is​ made up of​ your payment history, your outstanding debts and how often you apply for credit .​
Most lenders will use your FICO score .​
If you have a​ score of​ over 700, you should have no problem finding financing.
The best way to​ improve your credit score is​ to​ pay your bills on time .​
You can also pay off your credit card debt and hold off from applying for new credit to​ raise your score.
It is​ best to​ review your report to​ make sure it​ is​ accurate well in​ advance .​
It may take time to​ clear up any errors before you apply for a​ mortgage.
In today's real estate market, sellers like to​ work with buyers who are pre-approved for a​ mortgage .​
Pre-approval means that you have submitted a​ complete loan application and that the lender has verified your information, checked your credit and determined how much mortgage you can borrow .​
When you are preapproved, the lender is​ saying that you can borrow a​ certain dollar amount.
With pre-approval, the seller knows you have financial backing and you know exactly how much you can spend .​
This keeps you from a​ lot of​ stress of​ worrying if​ you will be approved for a​ mortgage for your dream home .​
You already know what you can afford.
Take the time to​ prepare to​ buy a​ home before you even start looking, it​ will save you a​ lot of​ stress and make the process much easier.




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