Know why you are buying a house A lot of Millennial's are making drastic moves in order to save and buy a house. Take a few moments to write out everything you believe home ownership can bring you and zoom in on WHY you are taking this step! You have some that are tired of paying rent and others who do not want the responsibility. Is it worth waiting in taking advantage of the low interest rate today? Are you prepared to pay a down payment and maybe closing cost? How is your credit or your debt to income ratio? Let’s look at some other things pertaining to buying.
Determine your budget and timeline
A lot of new buyers do not realize everything that is entitled with buying a house. Credit, money and debit. In order to qualify for an FHA loan (one of the most common loan programs), you need to have a minimum 580 credit score and a 3.5% down-payment. For an investment property you need a minimum credit score of 640. Don’t forget you will need closing cost unless you have a bad azz realtor who know how to negotiate in your favor. You have appraisal and inspection fees to pay for as well. This is cost prior to closing. Oh and a due diligence fee to the seller. Credit Issues
What does your credit look like?
35% Payment History
30% Total Debt
15% Length of History
10% New Credit History
10% Types of Credit Used
some of you have a balanced credit profile and others of course have a few things that need tweaked. Make sure you are paying bills on time and do not over spend more than 30% of total credit lines of credit you have available. In order to have balanced credit, your profile can have car loan, credit lines, mortgage loans, etc.
Shop around for other mortgage lenders
A good mortgage rate means less interests. So not speaking with multiple lenders is one of the mistakes to avoid when buying a house. If you belong to a credit union start there first. They usually have the lowest rate compared to traditional banks. Typically,you have a 14 day window without your credit taking a penalty on hard inquiry.
If you have the patience, time and you did the homework to avoid these mistakes when buying a house, then your home-buying experience should be pretty interesting 🥳