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Are You Ready To Buy A New Home? |
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Written by Administrator
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Thursday, 13 December 2007 |
All of us, perhaps, dream of owning our own home someday, and despite the travails of the current mortgage sector, most still long to have a home of their own, and would gladly plump our life savings and salaries on getting the best mortgage offer possible.
At present, more than two-thirds of the US population owns their own home. Before you become a proud homeowner yourself, the first major step is to determine if you are really ready.
Since the decision to buy a home is a vital one, and probably one of the biggest financial decisions you'll ever make, that makes it equally important to equip yourself with the complete facts needing in buying a home. Once you know that buying a home is the right choice for you, learn the tools and methods needed for successfully getting the housing option of your choice, and making sure you get the most competitive mortgage or resale values.
Know Your Credit Standing
It's a critical part that you obtain a copy of your credit report or credit score in advance before making such a major home-purchase decision. Verify your credit report thoroughly to make sure there are no any negative or incorrect information that may derail your chances of getting a favorable mortgage.
Ensure that your financial house is in order, and catch up on any overdue payments. You could get an accurate credit report from many credit rating agencies, as such, you will arm yourself with the necessary information that lenders use to ascertain if you qualify for a mortgage.
Check Your Current Finances
Here are some questions you need to ask yourself, to make sure that when you jump into a decision to purchase a home, you have enough cash to sustain yourself, and not leave you out empty in the cold.
- Find out if you have enough cash to pay for the down payment.
A down payment is a percentage of the value of the property that you are required to pay upfront. Down payments may vary from 3 - 20% of the property's value, and also depends on the type of mortgage and the area where you are buying the house. If your down payment is less than 20%, you may probably be required to get property mortgage insurance.
- Can you prove you have the money?
If your funds are in a savings account, the lender will need proof that the money's there, for how long, and that it wasn't borrowed. Some housing projects have special programs that allow first-time buyers to accept gifts towards the down payment. However, some lenders require a certain amount of the down payment come from the savings that you have personally accumulated.
- Do you have the closing costs?
Closing costs generally include points, taxes, title insurance, financing costs, and other settlement costs. These costs usually range from 2 - 7% of the property value. You will receive an estimate of these costs from your lender after you apply for a mortgage.
Other Factors You Need to Consider
Aside from the concerns raised earlier, you also need to ask yourself, Have you been employed regularly for the past two years, and getting dependable and adequate income?. If yes, then that would rate well with creditors. Next, ask yourself, do you always pay your bills on time?, and is your total debt, including credit cards and car loans, manageable?.
Lastly , ask yourself, do you plan to live in the house for at least two years so that it builds some equity? If you can answer positively to at least most of the questions raised, then you could safely say that this would be a great time to consider buying a home.
Vanessa Arellano Doctor
http://realestatepress.org |
