There are certain things one needs to do before buying a home as they are a huge investment. The simple steps of buying a house include; improving one’s credit score, figuring out what you can afford, saving for down payment or closing costs, building a healthy savings account, getting pre-approved for a mortgage and finally buying the house you like. In improving your credit score one is able to get the best deals in terms of paying down payment and also have the best rates on the market. A bank rate calculator is used to figure out how much an individual can afford in terms of purchasing a house. In addition one also adds housing expenses such as insurance, utilities and taxes.
Saving for down payment or closing costs involves an individual needs to save between three percent and twenty percent of the house price for a down payment. In order to know the amount of down payment an individual needs to come up with then the credit history and loan terms are used. Down payment assistance, first time home buyers and home buyers assistance are some of the assistance one can get if coming up with the individual payment is hard. Based on location or for particular buyers such as first time buyers is offered by down payment assistance. A portion of the closing cost can be paid by sellers in a buyer’s market as they can negotiate this. In order to assure the lender that you are not living pay check to pay check then building a healthy saving account is required.
The money saved helps in paying for maintenance and repair of the home while at the same time individuals are given more latitude on criteria if the backers and the lenders see that one has a cash cushion. Some repairs like new roof fixes or water heater fixes are huge repairs which come up suddenly and drain your budget while on the other hand most repairs are sporadic. In order to build a healthy savings one needs to assume that they’ll spend 2.5 to 3 percent of the home’s value each year on upkeep and repairs.
By getting your finances in order is important in order to aid in getting pre-approved for a mortgage. In order to know how much one can afford before entering the first house one needs to have a mortgage pre-approval. In addition use of the bank rate calculator aids in determining how much one can afford to buy. Buying the house you like is the last step in which short term home ownership is quite expensive as its dependent by how much one puts down and what it costs to sell the old hose and move.