Owning a house can give you a sense of achievement. It is great to raise children and make your children feel secure and provide a stable environment for them. A house purchase in most cases will increase in value and can provide equity for secured loans to fund future ventures such as a business startup. A house is the best investment you can get provided you get it for the right price and in a promising location. Owning a home involve a significant amount of maturity as it may be the biggest decision a person can make. It requires a long term commitment when purchased at market value. It also requires ongoing maintenance and proper budgeting.
Majority of first-time homebuyers cannot afford to pay cash for a house. The average first-time homebuyer has probably been living with their parents or in a rental apartment. In any case, it takes planning to purchase a home. The first step towards house purchase is to pull your credit and assess what credit issues you may have. If credit issues exist, you need to dispute it with the credit bureaus or work out an agreement with that creditor to resolve the problem (s). Credit and adequate income are the most critical factors for a home purchase. It is essential to manage your bill payments properly that you will be able to get and keep a good credit score.
One of the best ways to keep on top of your bill payments is to deposit your paychecks in a bank account and set up bill payments with autopay. Thus, your task will only be to concentrate on making enough income to accumulate in the bank. Some people will get a bad credit score simply because they forget to mail a payment to a creditor; not because they did not have the money. Also, the critical factor in paying bills is not the fact of making enough money, but in several cases wasting on unessential things.
Many people make a decent income but still live hand to mouth because of their carefree spending habits. This care free-spending habit is because there is no budget plan with a financial goal setting. You may want to reduce going out clubs or bars where drinks and food are costly. For instance, you could buy a bottle at a liquor store and invite friends over, and it will cost you less than what you spend in the club or bar. Eating at home rather than eating out at a restaurant will be less expensive and healthier if you learn how, or know how to cook. Sometimes it is not how much you make is how much you hang onto.
If you know that you don’t have credit issues or your credit issues have been resolving, it is time to seek a mortgage broker or loan officer to determine your loan to income ratio. The loan officer will want to see current pay stubs, tax filings for two previous years, and three months bank statements. If all are satisfactory, the loan officer will tell you what loan programs are available for you to get the highest loan amount with the least out of pocket money and will give you a preapprove letter stating the amount of loan you are qualified to get. The loan officer will also indicate how much out of pocket money; you will need to close on the home purchase.
Once you get the preapproval letter, then you are ready to contact a real estate agent. The real estate agent will then search for a house within the amount of the preapproval loan letter.