Across the world, there are thousands of people looking to buy a home – either now or in the future. Over the last few years, lower interest rates have come along, making it more affordable than ever to buy a home. When you stop and give it some thought – buying a home makes a lot more sense than renting a home or an apartment. But let’s face it, this is easily one of the most difficult decisions you will ever make in your lifetime, so you need to be smart and know what you are really doing.
In order to buy a house, you’ll need to start saving money to have enough for the closing costs and a down payment. Your down payment will normally need to be around 15% of the price or the real value of the property – whichever is lower. To be on the safe side, you should always try to have 20% put down. If you aren’t able to put 20% down, you’ll need to buy some private mortgage insurance, which will cost you more in terms of your monthly payment. A good advice is to know the property value before you make any commitment. If you are 100% clueless, think of using a computer solution like a Real estate analysis software to help you understand if the property you are buying is a good investment or not.
The usual closing cost is about 5% to 10% depending on the real estate agent, property, local laws, and county and seller’s conditions. Before you purchase the home, you should always get an estimate. An estimate won’t be the exact price but it will be really close. You should always plan to save up a bit more money than you need, just to be on the safe side. It’s always best to have more than enough than not enough.
You’ll know you’re ready to buy a home when you know exactly how much you can afford and you’re willing to stick with your plan. When you buy a home and get your monthly mortgage payment, it shouldn’t be any more than 25% of your total monthly income. Although there are lenders out there who will say that you can afford to pay more, you should never let them talk you into doing so – stick to your budget instead. Again, if you still feel confuse you can always ask the bank to advice you by using a Mortgage Calculator system , they are practical and they can help you to understand clearly how much you can really pay.
Keep in mind that there is always more money involved with a home other than the mortgage payment. You also have to pay for utilities, homeowners insurance, property taxes, and maintenance. Owning and caring for a home requires a lot of responsibility. If you’ve never owned a home before, it can take a bit of time to get used to.
Before you fill out any applications, you should always look over your credit report and check for any errors. Although you may think you don’t, you can easily get an error on your credit report and not even realize it. If you have an error on your credit report, it can cost you a lot of money in interest rates. An error will decrease your credit score, which will put you in a higher interest bracket and ultimately cost you a lot more money in the end. It pays to check your credit standing before approaching a lender. Don’t forget that this is one of the most important decisions you will take in your lifetime, so be smart, take your time and don’t be too emotional .
Give yourself some time to fix your credit should there be any by checking your credit report beforehand. Rebuilding credit can take time though, sometimes even years. You should always plan ahead, and give yourself plenty of time to fix your credit.
Remember this: you should always commit yourself to buying a property. You should always strive to get the best possible deals, which means knowing your credit and where you stand. This way, you can get the best interest rates (and trust me, that is pretty important if you consider you will be paying your house for a long time) You don’t want to buy a home with bad credit, simply because you’ll pay a lot more money for the home’s value. If you take the time to fix any credit problems and save up some money – you’ll be able to get a much better home for your money’s worth.