Preparation Tips For First-Time Home Buyers
Posted on: 13 October 2017
If you've been thinking about buying a home, it's important to ensure that you have everything in order to ensure that you are making the right decision. There are a few key things you should consider before you actually start looking at homes for sale. Here's a look at what you need to know now to help you be as ready as you can be when it's time to make an offer and apply for a loan.
Make Sure Of Your Finances
When you get ready to apply for the mortgage for the home, you'll need to have your finances in solid order first. Your bank is going to look at a couple of specific things when it comes to determining not only if you qualify but also how much you qualify for in terms of the loan. Start by making sure that you not only have enough set aside for a ten- to twenty-percent down payment, but also that you have cash reserves saved to cover your expenses for a couple of months, including your projected house payment, the insurance costs, your utilities, and any other expenses you might incur.
In addition, when you're looking at your finances, the other thing you should look at is your existing debts. Your bank will look at the ratio of how much money you're making compared to what you spend. You need to keep that ratio as low as possible, as in reducing as much of your debt as you can. This makes you more financially stable in the eyes of the bank.
Know What You're Looking For
When you made the decision to buy a home, you may have started out with a concept in mind of what you consider to be your dream home. Or, you may have fallen into the standard vision of a single-family home with a white picket fence. Before you actually start shopping, though, it's in your best interest to take some time and really think objectively about what you should be investing in. There are many options beyond the traditional single-family ranch home, so don't paint yourself into a corner right from the start.
For example, if you want to put yourself into a stronger financial position, you may want to consider investing in a duplex or a tri-plex. The multi-family dwelling structure is a great way to generate some income off your primary residence. The key is to be selective about who you rent the other sections out to. Being cautious will ensure that you have an investment property that's also a primary residence.
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