It is most likely that buying a home might be your biggest purchase ever. To help you get started, here are Six Useful Tips to help you better choices.
- Attend Free Home Buying Classes and Seminars
The Washington State Housing Commission, in partnership with local housing associations, organizes commission-supported homebuyer training seminars that can help home buyers figure out how to buy and keep a home. These seminars are free and open to all. It’s also the initial stage in buying a home and it may discuss issues on first home loan programs, assistance on a downpayment, and other relevant topics.
2. Know How Much You Can Afford
To know how much home you can afford, ask yourself these questions;
a. How much will your monthly payments be? Keep in mind future changes in your household income.
b. Is there a possibility of an increase in your income in the future?
c. If the interest rate is adjustable, can you afford larger payments once the rates increase?
Determine your debt-to-income ratio by dividing your debt payments per month by your monthly income. This ratio will help lenders decide how much monthly payment they can afford.
3. Check your credit standing
Your credit report and score can make or break your chances of getting approved for a loan or getting a better interest rate. Check your credit standing and fix issues that are negatively impacting your score.
4. Understand the difference between Loan Pre-Qualification and Loan Pre-Approval
Lenders will look into your;
a. Income
b. Your downpayment or equity
c. Your credit history and credit score
d. Your debt-to-income ratio
e. How much money you saved
f. And the property you plan to purchase
6. Expect Closing Costs
Before closing the deal to your new home, you will be required to pay a couple of different charges called Closing Costs. These charges are related to the purchase of your home and charges related to getting a mortgage. Depending on your loan amount and interest rates, closing costs can typically be between 3 and 5 percent.
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