Renting a home is a difficult and never-ending process of moving regularly to find a better place with nicer and quieter neighbors and better rent. However, when you are ready to put all that behind and buy a home that you can invest in, there are some steps you should take to get you prepared for the process. The following provides you with some recommendations to help you through the process to buy a house this year.
Review Your Credit
Whether you are planning to buy a home this winter or next summer, the earlier you start in the process, the more prepared you will be. And preparation is key to getting your credit into shape so that you can get a good mortgage rate with favorable terms. The lower your interest rate and better the terms on your mortgage, the more affordable your payment will be, which will free up your income for savings, vacations, and maintaining and updating the home. And you can do this and better your chances of getting a great mortgage by improving your credit.
Review your credit report from each of the three credit bureaus, because your mortgage broker is going to look at a tri-merge report from all three credit bureaus. This will provide them with credit scores from all three and also any information reported on your file. If you find any errors on your credit file, immediately dispute them through the credit bureau dispute process, which you can do online or through the mail.
Keep your credit great by continuing to make your payments on time. Then, improve your credit by paying down revolving debt and reducing your credit card balances. If you can pay down your revolving lines of credit to be below a certain percent of the credit line, this will boost your credit score considerably because it shows you can manage your credit responsibly.
Evaluate Your Finances
Another important step is to review your finances and your household budget to establish a comfortable housing budget. Along with your regular financial obligations, look at how much you can put toward a mortgage payment. Keep in mind the mortgage payment will need to include taxes and insurance, along with potential mortgage insurance if your down payment is low.
To help out your buying position, look at how much you can save up for a down payment. The more you save, the less your mortgage will cost you over the years, and potentially increase how much home you can buy.
For more information about buying single-family homes, contact a local real estate agent.