Investing in a house is certainly going to improve your life and how to get the best form of financing is key as a first step, to ensure your investment will be a dream come true, not a nightmare of unsustainable debt. All depends on how you invest your money and knowing which home loans are right for you. Please read our guide below about the requirements to buy a house.
First of all, take an inventory of your finances. Any lender with whom you consult the possibilities of getting a mortgage will look at your income, if you currently have other real estate, how your debt payment history has been, your current employment situation, among other factors.
Before you start looking at properties, properly define what budget you have to buy a home. That way you’ll save time, money and effort in the long run because having a budget will help you focus your search on the most viable options.
In addition, the US government, through the Consumer Financial Protection Bureau (CFPB), makes it possible for you to speak with your housing counselors. These advisors can guide you and offer personalized help to decide the best time to buy a home, help you with your loan, review your credit reports, and more.
If this is your first time buying a home, ask a housing counselor if there are any assistance programs specific to your situation and ask for help to opt for the best mortgage for 1st home that you can get; you may even qualify for programs that are specifically designed to support first-time homebuyers.
In the United States there are two types of mortgages to buy a home: conventional mortgages and those backed by the government.
In general terms, FHA loans are more advisable, because the requirements to qualify are more flexible than conventional loans: you may or may not have a good credit history, the initial payments are lower and the interest rates are fixed at 3%.
On the other hand, conventional loans are those issued by private institutions such as banks, credit associations, private lenders or savings institutions and establish stricter requirements so as not to take risks due to non-payment. You need to have a good credit history to pay off a loan over 10, 15, 20 or 30 years, make a higher down payment than government-backed loans, make a minimum monthly payment of 5% (variable), and the interest rate can be fixed or variable.
It’s important to note that if you don’t make a minimum 20% down payment when applying for any of these loans, you need to pay mortgage insurance.
Now that you’ve followed the first two steps, it’s time to see what homes are for sale. There are free search engines where you can enter the zip code where you want to live and the available purchase options are displayed. Two of the search engines for this purpose are Trulia and Zillow.
In addition to searching on your own, contact a real estate agent to help you buy a home. Real estate agents can access properties for sale that may not be available on free search engines, so you can have more options to find something you like and within your means.
When you have already found the home you want, make your offer. Stick to the amount you have available to spend, including the amount you can borrow. When the person selling the house accepts your offer, you can then proceed to formally apply for your mortgage.
Hey, Mark Ladd here. I am a sports fanatic and have a passion for this. Particularly running is what I love best. However, around 5 years ago I had an accident that changed my life. I can no longer pursue those sporting activities, so I moved my focus on a different approach where I blog about the sports and other areas of life which I have grown to appreciate more since my accident.Click to read on