After renting a place for so long, you will always dream of having a home of your own. You will long for stability and security. You get tired of transferring from one rented place to another. You will realize that you have been throwing money on rent. At one point of your life you will want a home that is all yours.
However, buying a home is one major decision you must not hurriedly make. You will feel anxious that you will be spending much. In order to avoid worries and anxiety, it is good to look into your finances first, before going out to shop for a home.
Get Your Finances in Order before Shopping for a Home
- Figure out how much you can afford to buy a home. This amount will depend on your income, monthly expenses, credit rating, down payment and interest rate of mortgage.
- Study the different loan programs available.
- Get a free credit report. Make sure there are no errors. If possible try reducing your debt obligations. Pay down all loan balances.
- Shop for a lender. Check out where you can get mortgages and compare the interest rates, fees and period of payment. Make sure you understand the loan product you want to avail.
- Determine how much down payment you can afford. The higher the down payment, the lower is your monthly mortgage payment.
- Try considering an FHA loan. It has a minimum down payment requirement and allows sellers to pay some if not all of the closing costs.
- Secure a preapproved letter of your loan. The seller will feel secured that he will be paid. You will have an advantage over the other prospective buyers.
Some Helpful Tips in Home Buying
- When buying a home, remember that a desirable location is on the top of your list.
- Start shopping for a new home online. Most homes are advertised online.
- Tour homes that are within the parameters of your desired location.
- Make sure all contingencies are written into the contract. This is to protect your earnest money deposit.
- Inspect the home thoroughly and read the disclosures before signing the contract. The seller should let you know of major defects of the home.
- Before signing the contract, make a final walk-through the home to ensure that it is in the same condition when you agreed to buy it.