When people are looking for a house to buy, many say their real estate agent is a great source of information. About 78% of people say they feel this way. Online real estate sites are only slightly more popular. About 82% of home buyers look to these as resources. At least 92% of people look to the internet when they are shopping for new homes. About one third of home buyers are people who are buying their first home. Before you head to to find a house for sale, here are some tips to help you though the home buying process:
- Run your credit report. You need to have the same information that mortgage companies have. Knowing where you stand financially will also help narrow down your options. You will only be wasting your time if you look at a bunch of homes for sale that are totally out of your price range. When you do find a house for sale that you want to buy, the single most important thing the mortgage company will look at is your credit score. Not only will it have an impact on whether you get a loan, it will affect how much that loan costs.
- Check your report for mistakes. It does not happen all that often but it does happen. Look for unpaid bills and collection amounts. Keep in mind how your credit score is calculated. Your credit score is not just based on you paying your bills on time but credit agencies look at how much credit you have and how much you are using. This is called your credit utilization ratio and it can impact your credit score negatively.
- Evaluate your budget. You keep up with all of your bills every month but how much do you have to spend. Take a look at your budget and think about what you have coming in vs. going out. That can give you an idea of how much you can afford to spend on that house for sale. Now, maybe you have been saving some money every month so that you can buy a new home. Just be honest with yourself about your cash flow.
history to show. - Get all your documents together. Get your stuff together before you talk to a bank or other lender. You will need your tax returns for two years, two pay stubs or paychecks and at least two months of bank statements. Mortgage lenders just want to see that you can afford the mortgage so they know they are not taking a big risk by lending you money for your home. Be advised that this is not a quick process. If you are prepared for that, it will be easier for you to deal with it.
- Find a cosigner. If you are a first time home buyer and your credit is not stellar, you can always turn to someone with better credit to cosign your loan to help you qualify. If this is a route you think you want to take, both you and the cosigner need to understand the legal ramifications of this decision. If something happens and you are unable to make your payments, you risk not only your credit score but the score of your cosigner who will be on he hook for your mortgage payments. If you have any doubts about your ability to make your payments, it would be unfair to ask someone to cosign your loan.
- Look at cheaper properties. If you do go in for a mortgage and are rejected, you may want to look for a less expensive home. Talk to real estate agents about finding another house for sale. It could be that the amount you are asking for is just too much for your credit score. You can also look at different kinds of properties such as condos.
Buying a house is often the biggest purchase a person will ever make in their lives. This a big decision and one that deserves a lot of time and consideration. It is not something to jump into blindly. Take your time. Do your research. If you do these things, you will get the house you can afford.
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