Things To Do When Buying A Home In 2019

Things To Do When Buying A Home In 2019

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Buying your own home can be a very proud and rewarding feeling for you. Here are some important things to know and do to make your home buying exercise smooth and hassle-free.


Look at your credit score

All lenders analyze your credit report to check your trustworthiness. They will offer a low-interest rate if your score is high, but a low score can make your mortgage costly. You can even be denied a mortgage outright.


Improve your credit score through fiscal discipline

Try to improve your credit score before applying for a mortgage. It cannot be done overnight but you will find your score improving if you pay off your debts and finish your running balances in credit cards. You can also ask your credit rating agency to fix errors that you spot in your credit report.


How much of a home you can buy?

It is always a good idea to know how much of a home you can easily afford. You will only be wasting your time if you keep looking at large houses with high price tags if you cannot afford them. You can use affordability calculator freely available online to see the price range you can afford easily. Once you know this figure, the next step is to shortlist the localities and the type of homes you are interested in. This will make your house hunt smart and organized.


Save enough money for the downpayment

All lenders ask you to pay nearly 15-20% of the value of the property you want to buy as down payment. This means you need around $80000 in your bank account if you want to buy a house with a price tag of $400000. You should start saving early to have enough money in your account to pay for your down payment.


Ways to save for the downpayment

Make a monthly budget to know where your money is going. Cut down on unnecessary expenses like eating out and entertainment. Open a savings account and make it a point to save 10% of your income to save money for down payment.


Lower your debt to income ratio

To be eligible for a bigger mortgage, try to lower your debt to income ratio. You need to pay off your debts to lower this ratio. Pay off balances in your credit card and repay other loans to achieve a low DTI.


Keep in mind other costs of buying

There are other costs of buying a home such as closing costs, insurance, property tax, and various kinds of fees charged by your lender.


Don’t apply for new credit accounts

Make sure you do not open new lines of credit until your loan application has been finalized. This will hamper with your chances of a mortgage. Also, don’t switch jobs as lenders look for consistency in your employment.

Hire a good quality realtor

A reliable and experienced realtor can remove hurdles in your way and make sure all legal formalities are completed. He will find a home that matches your requirements and negotiate with the seller to lower his price.


Shop around for a lender and get pre-approved

You should shop around to get the best possible mortgage deal for buying a home. Once you find the best lender, get pre-approved as it helps in showing sellers that you are a serious buyer.


Find the home and make an offer

Once you have found your dream home, make a good offer and don’t forget to include contingencies of mortgage and inspection in it. You can walk away from the deal if the inspection reveals serious flaws in the structure of the house.


Go for an appraisal

Appraisal, done by a professional, reveals the true worth of the home and also makes sure that you easily get mortgage for purchase.


Close the deal

This is the final step in home buying process. You and the seller sign all the papers and ownership of the

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