Top 6 Things To Know Before Buying A Home
The common misconception about buying a home is that you need to put a lot of money down in order to secure a loan… FALSE! There are many programs available to help you with the down payment! Here is a quick checklist of what to keep in mind when you are thinking about diving into the real estate market as a buyer!
1. Check and Strengthen Your Credit Score
The higher your credit score, the lower your monthly payments. Keep tabs by pulling your credit reports and ensuring you’re not being unfairly penalized for old, paid or settled debts.
2. Determine How Much You Can Afford
There are various rules of thumb that will help you get an idea of how much home you can afford. If you’re using FHA financing, as almost one-fifth of buyers get FHA-insured loans, your home payment can’t exceed 31 percent of your monthly income. But with some mitigating factors, FHA will let you go higher.
3. Have Enough Saved Up For A Down Payment
Depending on your credit and financing, you’ll typically need to save enough money for a down payment — somewhere between 3 percent and 20 percent of the home’s price.
4. Build Up Your Savings Account
Your lender wants to see that you’re not living paycheck to paycheck. If you have 3 to 5 months’ worth of mortgage payments set aside, that makes you a much better loan candidate.
5. Get Pre-Approved
It is important to know what you can and cannot afford. By doing this, it will help eliminate the potential possibilities and help you focus on the realistic houses you can purchase.
6. Buy A Home You Love!
If you’re buying today for yourself and your family, you want a home that will make you happy for the next few years. Make certain you are happy with the house you have chosen.