As a family grows, most adults dream of owning their own household. Renting has too many restrictions, and it might be more expensive to afford those monthly payments compared to owning.
It’s time to get into a new home of your own. Learn about the challenges ahead so that you’re prepared for a new home purchase.
Clean Up Your Credit Report
Don’t start house hunting until you know what your credit report reflects. Buying a new home will almost always require a financing option. You’ll need to have good credit in order to apply and gain a fair loan. Take a critical look at your credit report. Verify that all of the information is correct. Although some negative items may exist, they’ll remain on the report if they’re true. Contact any creditors that have incorrect information on your report. You don’t want this information to hinder the home-loan process.
Start a Savings Plan
With your credit in good standing, begin the savings plan. Depending on the property that you desire, you’ll need several thousand dollars as a down payment. In fact, a 20 percent down payment isn’t unheard of in the industry. Cut down on luxury items, such as eating out, and look for extra work to build up that savings. You’ll be able to compete with other buyers if you have a substantial down payment. Sellers might choose your bid over others when a 20 percent down payment is part of the deal.
Price Those Mortgages
There are several types of mortgages in the marketplace today, including fixed and adjustable selections. A fixed mortgage normally has a high interest rate, but your payments won’t change over the course of the loan. Adjustable loans, in contrast, have lower rates that will change as the economy ebbs and flows. If you can afford some movement on the payment amount, an adjustable mortgage is a smart choice.
Visiting a Lender
Work with a lender before you attend any open houses. The lender looks at your assets and liabilities so that you can know a price range for the new home purchase. Some companies, like Assurance Financial Group, know that with this information in mind, you can more easily narrow down your shopping list. You’ll also have a faster loan approval time compared to borrowers who’re just starting the financing process.
Work with a real-estate professional who understands the area in question. These professionals may have some inside knowledge about possible home sales, tax information and school statistics. At the end of your search, the home should fit your personality and budget for many years to come.
This is a guest post: Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on Twitter and Facebook