There’s a big difference between being ready to buy a house and wanting to buy a house. According to a recent study by Bank of the West, around 56% of millennials believe that retiring in comfort and paying off any debt is less important than owning a house. They say that they want to buy a house but may or may not be ready.
Despite the number of people wanting to buy their dream homes, not all of them are financially prepared. Here are the things you have to do before you can buy your own house aside from looking for mortgage broker Houston.
Check Your Credit Score
When you are planning on buying a home, the first things you have to check are your credit report and score. These show your worthiness and credit responsibility. Your score can affect your mortgage rate. The higher credit score you have, the lower interest rate you can avail. As such, you will owe lesser money during the entire period of your loan.
Review Your Budget
If you are aiming to have a good credit score, check your financial state. You can use the 28-36 rule to know where your money is. So how does it work? Your maximum household expenses should not be more than 28% of your gross monthly income. On the other hand, your loans and credit cards should not be more than 36%.
If you have a high credit score and have built a proper down payment, you might be feeling pretty confident that you can buy your dream house. However, unless you get pre-approved, then your home will only be in your dreams.
Getting pre-qualified and pre-approved are two different things. Pre-approval is all about completing your mortgage application with your financial records into consideration. On the other hand, prequalification is only based on what info you provide your lender.
Build Up Enough Money for Your Down Payment
Down payments for cars and homes are pretty similar. If you have a higher down payment, you can expect to have a lesser monthly payment. Cut back on some things so you can stash some money away for a down payment.
Get Yourself an Agent
When you are scouting an area, and you’re looking for a home, it is a great idea to have someone who is more knowledgeable about the place more than you. With the help of a real estate agent, you get to find the right home that you can afford and buy. Your best interest is what they have in mind especially since they always get their commission after a house is sold.
Get a Home Inspection
If you think this is unnecessary, think again. Getting a home inspection lets you check every detail in your house. Merely touring the house yourself is not enough to know if there’s any water leak or underlying problem.
With the help of a home inspection, you can take any issue found in the house back to the seller and negotiate. They can either fix the problem or lower their asking price whichever they choose