Buying a home for the first time is no less than a dream coming true. Reason being, home is, doubtlessly, the single largest investment one makes in his entire life. Moreover, there are hundreds of thousands of feelings associated with a home, this is the place where memories are made and cherished. People keep looking for their dream home; never settle until they find the right location and space. Then, it takes a suitcase full of cash to become a “homeowner”. So, we bring you Homebuyer’s Guide to Stay Financially Prepared so that you can enter your new home without any hassle.
Because home gives you much needed mental and emotional stability. Benefit of the home, would say that “Our home allows us to dream in the peace while protecting the dreamer”.
No matter what ‘Home’ means to you, there is surely something sentimental about the place we call home. It is the place where we hangout and chilled out with friends, family and loved ones and make a special memories and home is the place we make our own memories and home is the place we make it our own. Sometimes in our life we make a little reminder of how it feels to be at home, to come home and to leave home. But for making the new memories and hangout with your loved ones you need your perfect home like you want to, which is in your budget, which is like your dream capital for business. We have so many queries when we buy a home it is stressful and at a same time it is very exciting – moment of your life. This is the biggest purchase of your life & I will help you here with some points, that when and where you could buy home and make it your “Home Sweet Home”.
How can you Stay Financially Prepared
Check out the list of ways to ensure that you are financially prepared to buy a home or not.
How much you can Afford for your New Home
“How much I can afford for home?” question is I hear intermittently from a person wishing to buy a new home. The pledges you can manage on many elements, along with target your regular installment and yearly income.
Always try to keep 30- 36 % of your gross monthly income in your housing payment when you spend much more than that on your pledge, you risk becoming “House Poor” – Yes you want to live in a beautiful dream house but make sure it will not hit your monthly expenses.
When you buy home you need to clear with some points like your annual income, down payment, monthly debt, interest rate, income taxes, property taxes, mortgage insurance, loan term, you need make a full report for your home investment. For this affordability calculator helps you to determine what you can comfortably afford. It evaluates monthly income percentages your extra spend or a mortgage payment, your remaining income taxes and many more which need to buy a home it will evaluates everything.
In my point of view don’t see it like an investment, buy it because you want home you want comfort you want feeling which only your own home gives you. And Homebuyer’s Guide to Stay Financially Prepared for your new home
Formulate your Finance for a Mortgage Process
When you wish to find the home you want but you are not financially qualified to buy it. First, you need to economically in position for it like comfortable monthly housing payment, save pre purchase expenses, get your credit in your order.
Comfortable Monthly Housing Payment
Most important steps for preparing home ownership to understand how much we can afford for monthly housing costs.
Analyze your cash flow and determine your comfort zone. Organize your monthly expenses, and figure out your monthly net income. Your pledge payment plus all related housing costs should fit into your budget.
Save for Pre-Purchase Expenses
You need enough cash for, down payment, closing cost and at least few months pledge payment in reserve. You also need some extra expenses like costs, furniture, repairs etc.
Down payment will be the biggest expense. Sometimes it can takes months or years to accumulate enough money for the home like you want. If you don’t have sufficient money what you need for home than start saving.
Get your Credit in Order
Credit rating is a very important factor for your mortgage. Also know your credit scores. FICO’s score is most commonly used, which was developed by Fair, Issac and company.
It is easier to get a mortgage loan by set a higher credit score for a home loan. This process takes several months. You can access your scores, either purchase and get annual report service. If the information in your report is negative but accurate than try to get good credit scores.
After the attractive credit you are ready to buy your dream home.
Go Shopping for Mortgage
The largest investment of everyone’s life is buying a home. Home is a long term obligation of your finance, and the rate you pay for your mortgage. It affects the overall cost of your new home.
There are some steps to shop around the lowest cost with quality place.
By your credit rate the lenders will determine that you qualify for a loan or not. You will be offered a better term by higher credit scores to get a error free credit scores and try to obtain credit report of minimum six months before so you can fix the errors and will able to get good credit score.
It is very important to determine how much you to borrow, which type of pledge you want and how long a term we need so we can fairly compare lenders.
There are two kinds of mortgage –
- Conventional loans
- Government-backed loans
65% of mortgage issued by conventional loans, and these are offered by private lenders. It depends on the size and criteria.
Government-backed loans are issued by government. They are also obtaining by private lenders. It has a down payment, low credit and more flexible income requirements.
Contact Several Lenders
First you need to understand the variety of available options to try to figure out pros and cons. You can also work with mortgage broker to find the best deal for you, they also bring you to the best lenders.
Get Mortgage and Pre-Confirmation
Without shopping around for around for a mortgage directly go to the bank and ask for a loan to the officer of the bank this is the very wrong way to get a mortgage.
First compare your rates and find a local mortgage broke. I also recommend you to use sites and compare four or five mortgage from different banks. Try to figure out the best depend upon your credit profile and the location you want for your home.
Buying your first home is very stressful and at the same point it is very exciting. Try to figure out all the points I have given above and buy best home like your dream house.