The Home Buyer Checklist
Think you’re ready to buy a home? Read on below and check off each major point before you take the plunge!
As stated in previous articles, you don’t want to mess with your credit score right before you buy. Get your debt in check and try to pay off as much debt as possible so your debt-to-income ratio is good. The higher your credit score, the easier it will be to get into your dream home. Typically you want to be above a 700 score. If you can get above 750, you are among the elite credit scorers so pat yourself on the back! If you check your credit score and you see that it is lower than you thought, you may be able to dispute it with a credit repair company such as Lexington Law.
Dave Ramsay and other debt education leaders preach that you shouldn’t exceed about 25% of your gross monthly income when it comes to a mortgage. If you are on a fixed income, getting in over your head on a mortgage can be a very serious and scary thing. If you find a home that you think is your dream home, but you don’t have the money at the time, it’s best to just stay in your current living situation and then save up for a new place a little longer.
Don’t Let Loan Fees Sneak Up On You
It can be easy to overlook loan fees and closing costs when you buy a home. Typically a $190,000 to $200,000 home could wind up costing you $2,400 to $3,900 in closing costs. Also, depending on the location you decide to buy your home, you’ll want save up anywhere between 5% and 20% for a down payment. The more money you put down initially will help to get your monthly mortgage down.
Get Some Money In Savings
In general it’s always good to save up for a “rainy day”. But if you are planning on buying a home, you should really be thinking about saving for a down payment on a home or even 4 to 6 months of a future house payment to keep you safe from the consequences of not being able to pay your rent.
When you are ready to settle down, don’t settle for a house you don’t like just because it’s within budget! Sometimes it’s best to wait to buy a home. If the house is way over budget, it can be better to wait. But also, if the home just isn’t up to your standards whether because of the area or the outside look of the house, and you don’t want to remodel, then it could be a good idea to wait as well. Don’t get caught up in the hype of all of your friends seemingly buying homes and then you make a huge purchase that you are ultimately not happy about. Buying a home is not a small affair, make sure that when you finally make the leap, you buy the home you love!