What does boiling water have to do with buying a home? Well boiling water involves a pot, water, heat and a bit of time. The same with buying a home….credit, down payment, lender and a fantastic REALTOR®.
GOOD REASONS TO BECOME A HOME OWNER
Your credit profile is important to a lender. While you’re preparing to buy a home, be sure you’re responsibly managing your current debt. Always pay your bills on time and whittle away at your outstanding balances by paying more than the minimum. In most cases, lenders like to see a borrower with a debt-to-income ratio of 36% or less. Your credit card balance should be not more than 30% of the max balance. If you have a $1000 max then you should have no more than a $300 balance. The great thing about credit card balances is that it is a month to month hit on your credit score. As soon as it hits a mile stone your credit score will reflect it the next billing cycle.
Before you rush into house-hunting buying mode, get a mortgage preapproval. This process is used to help determine how much money you’re qualified to borrow for buying a home. Once you’re preapproved, you’ll have a more realistic expectation of which “for-sale” houses fall within your budget. You may qualify for a loan that is roughly 3 times your gross annual income. Shop for the lender best suited to your needs. Start with who you do you banking with. Most times they will discount a small percent if you have an auto payment plan with them.
Although a 20% down payment is nice, it’s not mandatory. Many lenders expect buyers to put down at least 3%. The Federal Housing Administration (FHA), requires a 3.5% down payment. However, if you’re interested in building sizable equity right away, stash a hefty amount of cash to take to the closing table. Additionally, do your due diligence to find out about any local down payment assistance programs. Lenders have this information and are glad to give you the information.
When you buy a home, you’re also investing in the community that surrounds it. More importantly, your home becomes central to every other aspect of your life. As you shop for homes, consider your work commute, nearby schools and any extracurricular activities in which you and your family might participate. I highly recommend a REALTOR® who is located in the community where you want to buy.
OH by the way. I am your local BEAUMONT REALTOR® I have practice Real Estate in Beaumont for over 14 years. I have a strong knowledge of the market here and the surrounding pass area. If you are looking to buy a home, call me!