4 Home Buying Tips to Help You on Your Next Home Purchase
Are you currently preparing to buy a home?
Do you feel empowered as a homebuyer in knowing how you should proceed?
Making a decision to buy a home is a process within itself.
Nonetheless, knowing how you should proceed and develop all the knowledge and relationships you’ll need to make it a successful venture.
A starting point is helpful and can come in handy in your preparation process.
There are several things you should know and today we are going to share some tips on getting you prepared for buying a home.
Let’s get started.
Before you jump to conclusions on if you’re ready or not, you need to properly evaluate your current situation.
Your short-term goals, your long-term goals and deciding what works best for you now, are all things you want to analyze.
Renting versus buying could be the best option for you if its more suitable financially.
- Perhaps you’ll need to move again within a short period of time, you need to improve your credit rating, or maybe you cannot uphold the physical responsibilities in maintaining a home.
When you own a home, you must complete anything necessary on your land and in the home, yourself.
Planning is important and it means you assess all of the things mentioned here to decide what is the best plan for you.
This brings us to the next step…
The next key aspect in determining if you are ready to buy a home is based upon your financial stability.
If you don’t see stability in your long-term employment, or if you see yourself changing industries within your employers, you are not ready.
Lenders with required job tenure, usually align your eligibility based upon your tenure in that industry.
If you change jobs, but are still in the same industry, that tenure could be cumulatively counted and acceptable.
However, if you change jobs and go into a new industry, you could be starting the eligibility clock over.
Stability in job security and your pay, is an important aspect in deciding whether to take on the obligation of having a mortgage.
Unlike your rent payments, your mortgage is a reportable expense on your credit report.
So, although we all hope it doesn’t happen, anything derogatory within your payment history will affect your credit report and creditability going forward.
So, be sure you are ready for the obligation of having a mortgage.
- Check out our Home Buying Investment Calculator that’s perfect in preparing you for everything financially related to buying a home.
See a helpful tutorial here on our YouTube page.
Once, you know you are financially stable and you gain understanding of your affordability using the calculator, you are ready to start preparing for the purchase.
This brings us to the next step…
Being that you know you are financially stable and you know your affordability, you are now ready to start preparing for the purchase.
The first thing you’ll want to do is know your credit score and if everything on your credit report is accurate.
Any portion of your credit report that can be improved to help your score, and financially eligibility with the lender, is very important.
Your credit score will determine the annual percentage rate (APR), that you’ll be eligible for, and this rate directly affects your monthly payment.
- Don’t worry, the separation between your credit-based affordability, your true affordability, and the lender’s max lending amount, based upon your debt to income (DTI) ratio, is in the Home Buying Investment Calculator as well. The mortgage calculator is included as well.
Use annualcreditreport.com for a free annual credit report to review your credit reports with all the bureaus for accuracy.
- There is a payment required to receive your score.
Preparing to have the best possible score before applying with any lender is very important.
Be mindful to plan at least 3 months minimum for this process.
If a correction is needed, the creditors on your credit report only report monthly. Therefore, if something is corrected, it could take a month for the correction to be reported.
You’ll need time to review your report, dispute any inaccuracies and await the corrections to be updated with the bureaus.
- Check the dates that your creditors report to the credit bureaus to understand when your updates will be communicated to the credit bureaus.
- Also, inquire with the credit bureaus to ask how long it takes them to update any corrections once received from the creditors.
Once you’ve corrected your score and credit report to support you being more fundable, you are ready for the next step.
Notice the title of this section is lender interviews.
Yes! You are the customer and you are doing the lender the favor of giving them your business! Don’t forget that…
Your first step is to call several lenders to find out their eligibility requirements and their current rates for top tier credit ratings.
- You can also conduct a portion of this step earlier in the process just so you know the eligibility requirements.
Ultimately, the interview process is for you to align who has the best products and services for you.
When you begin the interviewing process you’ll want to inquire about the following:
- The best rates the lender is currently offering for top tier credit ratings.
- All the fees that are associated with the loan and if any are negotiable.
- Which fees need to be paid upfront.
- What the rate-lock process looks like if you choose to finance with them.
- How long it will take them to close.
- What first-time homebuyer programs they sponsor and how many the loan officer has had success with acquiring for their customers.
Note: Homebuyer classes are usually available in every county where you can be taught several important factors in buying a home. They will provide contacts for lenders who support down payment or low credit score assistance programs, direct down payment assistance programs for your reference, and provide the certificate that allows you eligibility to receive any down payment assistance. Your income will usually need to be below 80% of the median income of the area you would purchase in and you cannot have bought a home within 3 years. The classes will also provide connections to other necessary relationships, like with realtors, attorneys and inspectors.
- For the full scope on home buying education, check out our eBook, Securing Grant Money: Step by Step Guide for First Time Home Buyers by C.R. Wesley. This is a great source at getting you educated in an efficient manner.
Use the information you get from each lender to negotiate and find out who has the best rates, terms and programs to support you.
You are now ready to select a lender.
- Don’t worry, the financial aspects of the out of pocket money and the closing cost expenses are all in the Home Buying Investment Calculator as well. The calculator covers the full scope of all things financially related to you buying a home.
Join us in a future article to get the next steps after selecting your lender.
This is a great starting point for any home buyer.
Thanks for joining us today faithful readers – future leaders.
Love ya and keep striving for growth.
Please comment if this information has be helpful for you today.
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