Home buying is one of the most exciting and nerve-racking things you’ll ever do in your adult life. You have to go through the process of getting approved for a home loan. You have to go through finding a house within your budget that both you and your wife can agree on. There’s so much to do and the only one you to do it all.
Wouldn’t it be great if there was a way to make the home-buying process a little smoother? There may not be a magic pill you can take that will erase the mountain of paperwork or the closing process ahead of you, but there are ways to put yourself in a better position to buy the home of your dreams. Continue reading to get some tips to help you maximize the home-buying process.
1. Work on your credit score.
When trying to get a home loan, your credit is one of the most important factors lenders will take into consideration when they judge your creditworthiness. There have been plenty of people in the United States who have had to labor through the buying process only to be rejected for a loan because they had a low credit score.
Your credit score isn’t just a number. To lenders, it’s a window into your finances. To get a conventional loan from most traditional lenders, you have to have a credit score of at least 620. To get an FHA loan from the government with a 3.5% down payment, you have to have a credit score of at least 580.
If you have an investment property that you want to use as collateral to secure your mortgage loan, you may qualify for a hard money loan. Hard money is a physical asset, usually of high value and liquidity, with which to secure your loan. Lenders use the value of the investment property to determine your eligibility as a borrower and to determine the value of the hard money loan they offer.
It’s not hard to find an institution willing to offer you a hard money loan in Oregon, but if you want to deal with private lenders who have a reputation for working with borrowers to ensure their success, try Northwest Private Lending. These lenders offer short-term loans to help real estate investors and home buyers reach their financial goals.
2. Make your move part of your home buying budget.
First-time home buyers tend to underestimate the costs of moving into a new home. You should create a budget for your move before you start packing and loading things.
One way you can make the moving process easier is by getting a storage unit to store household goods that you won’t immediately have time to put away in storage than try to move around them as you adjust to your new home.
U.S. Self Storage offers safe and affordable self-storage solutions all over the United States. Renting a storage facility will add to your moving budget, but it will take away from your stress.
If you plan on moving yourself using a truck or a van, you should secure your cargo with an Unruli cargo management system. Their systems are designed to give you peace of mind that your cargo is safe as you travel the highways.
3. Give yourself time to save for a down payment.
When you’re trying to buy a home, one of the most important things you have to do is save for a down payment. You would be wise to give yourself at least a year to reach your financial goals before trying to purchase a new home. One of the best tips for saving for a down payment is to save at least half of what you expect to pay for your monthly mortgage payments every month for a year and a half.
4. Don’t go over your budget.
Too many people have lost everything they owned because they refused to wait a while longer for their dream home. There’s nothing wrong with wanting a luxurious house, but if it’s not in your budget at the moment, you should give yourself time to work up to that level rather than break your bank and lose everything you’ve worked for.
The rule of thumb is that your monthly mortgage payments shouldn’t equal up to more than 33% of your gross monthly income. As long as you keep your mortgage to 1/3 of your gross monthly income, you’ll be able to keep a roof over your head and save up for your dream home.
If anyone tells you the home-buying process is easy, they’re probably also trying to sell you beachfront real estate in Idaho. The fact of the matter is the only enjoyable parts of the process are touring prospective homes and closing your purchase. However, if you work on your credit, save for a down payment, make moving part of your budget plan, and stay within your budget, you can make the process much easier.