Are you looking into buying your very first home? Congratulations. Owning a home is certainly something that many people aspire to so as you set out to start looking into buying one, there are a few things you should expect in the process. To help prepare you for the ins and outs of the home-buying process, here are some things to consider:
1.The first loan offered may not be the best loan for you.
It’s very easy to start the process of looking into buying a home and choosing the first seemingly good deal that is made available to you. The truth is that as good a loan as that may be, you could be selling yourself short. You also want to see the various options available and their requirements, such as VA income requirements, as it’s important that you take the time to find the ideal financing option for your particular situation and goals.
2. It’s a serious financial commitment.
When it comes to buying a home, there are so many things to consider. For one, it’s a huge commitment. While most people recognize the aspect of needing to pay a mortgage for years to come, some don’t take the other factors into account. From fees to the down-payment to potential repairs, and more, committing to buying a home can be a serious financial endeavor. Not only that, but in some areas, you may even need to commit to potentially expensive monthly maintenance fees that are required by the HOA. So, before buying, consider all the fees and extras you may not have accounted for.
3. You may not be approved for the price you’ve been planning for.
While you may be looking at your finances and think that the money you saved for the down-payment is great and you’re well-positioned for the home of your dreams, bear in mind that there may be a variety of factors that mean you’re not able to afford the type of house you had originally thought of buying. Because lenders look at a broad variety of factors relating to your income and assets, at the end of the day, your loan may not get you that huge home with a large yard in the BEST location that you originally dreamed of buying. Not to worry; there may be a few compromises that you’ll need to make along the way, but you’re bound to find a great option that suits your needs and your price range.
4. It helps to have debt paid off.
When applying for a mortgage loan, it can be helpful to have your debt paid off or at least most of it. You’ll have your debt-to-income ratio looked at and a large amount of debt yet to be paid can be a red flag for the lender you’re trying to get approved with. If buying a home is a few years down the line, consider paying off your debt as soon as possible. It can go far when it’s time to get approved for that home you want to buy.
5. The better your credit, the better the outcome.
Along the same lines, your credit needs to be in a pretty good condition if you want to be able to buy a home. If your score is above 720, you can expect better interest rates. Lower than 620 and you may not even be approved at all. Again, if you hope to buy a home in a couple of years, it could be a good time to start building a solid credit history now.
There are a plethora of things to think about when planning for buying a home. These above-mentioned aspects are important to know so that when it comes time to start the process, you’re fully prepared. From your credit to the type of loan you apply for, buying a home requires planning and patience, but at the end of the day, all of this will be worth it.