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Prepare to Buy Your Home_ Get the Very Best Interest Rate
Category - Home Buying Questions - General Home Buying FAQ's


A home is one of the most exciting purchases that you will ever make. It doesnít matter, whether you are purchasing an existing house or having one built. This is a milestone in your life, which is why it takes a lot of consideration. The housing market has gone through many upís and downís over the past 5 years. Experts these days, however, see nothing but bright lights for this industry. The National Association of Realtorsí showed a 14% year-over-year increase in August 2013.

The increase in home values and sales shows an important improvement. Home buyers have many options when it comes to finding the right properties. Interest rates are currently at an all-time low. This is a great time for buyers to get the homes that the want. It is also a good time for refinancing or getting home equity. The average home sale around the country as of July 2013 was $213,500. Not everyone will be looking in this price range, but this does show that buyers are active.

There are many things to take into consideration before purchasing a home. You income and budget are definitely two of these things. They not only determine the type of home that you get but what sort of interest rate youíre likely to get. There are a lot of lenders out there trying to get your business. Not all of them are going to quote you the prices that you want. This is why preparing for this process is good. You will need information about getting mortgage loans and to organize your own finances. Prepared home buyers often are able to get low mortgage rates.

Keep Good Financial Records

Buying a home is exciting but it can be grueling, as well. Lenders are going to want to see a lot of your financial records. Being organized is going to help you to go through the process without much hassle. January 2014 marks the date where new regulations go into effect for lenders. They are going to be offering loans only after determining the financial stability of borrowers. In other words, showing your financial history is going to be important.

Your bank statements, w-2ís, tax returns and other documents will be required. Regular note taking and documenting could prove helpful when itís time to get a loan processes. Some lenders may ask questions about financial gifts or discrepancies on documents. Good records can smooth the process and aid you in getting the rate that you want.

Pay Off Your Debt

Many people know at least a year or more in advance that they want to purchase a home. Even if they are not yet ready to do so, preparing is a good idea. There are many wise things that can be done before you buy your home. Paying off oneís debt is certainly one of the most important. The amount of debt that you have will factor into the lending process. The average lender is going to scrutinize not only the amount of the debt.

Your payment history for your debt will be considered as well. The more debt that you pay off the better your experience will be. Less debt is important when you want to get the lowest interest rate available. Some studies show that it is favorable to have debt at least 28% or less than your income. This certainly helps when beginning a new mortgage.

Work On Your Credit

You donít have to have perfect credit in order to buy a house. There are lenders who will work with those in the process of rebuilding credit. In many instances, however, these are borrowers that will need to have a larger down payment. There are a few things that you can do to work on your credit before you make a home purchase. Lowering debt and making regular payments will help this process.

Regularly checking your credit report is another good idea. This is a way to determine if there are errors that could be reflecting negatively. It is also a way to see exactly is on the report. Opening new lines of credit during this time is not wise. Since youíre in the building process, you should not add to your debt items. According to Time Magazine Real Estate and Homes, the percentage of available credit should be under 30%.

Use a Nice Down Payment

The more time that you give yourself before you purchase, the more time you have to save. Down payments are terrific tools for securing good interest rates. Lenders have often expected borrowers to put down at least 20% of the homeís value. Not all buyers are able to apply this percentage to their loan. Having a nice amount, however, can be extremely helpful. The combination of a good credit score and a reasonable down payment is enough to get the mortgage you want.

Putting together a saving plan for this down payment is a great idea. This amount will decrease your overall loan amount. You will benefit not only monthly but over the life of your mortgage loan. There are real changes that can be made in oneís budget to save for this payment.

Lock in Low Rates

Home buyers have to be wise when it comes to locking in low interest rates. Waiting for them to lower significantly could be a bit of a gamble. Due to pursuits of the Federal Reserve it is unlikely that 2014 rates will drop in any big way. This is why taking advantage of good quotes for homes is important. If the price is right and the rate is low, it may be the right time to get your mortgage moving along.

This is also an important consideration for those wanting to refinance existing loan. Low interest rates apply here and can benefit borrowers with a variety of different loans. Locked rates are not in jeopardy of change like fluctuating ones.

You can prepare to buy the home that you want in a number of ways. This process is good for getting the price that you want to pay. It is instrumental to getting the lowest possible interest rate for your loan. This will decrease the amount that you pay in the long-term. Preparing and researching lenders is helpful too.
 
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Home Buying Questions - General Home Buying FAQ's
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