2018 came along with new rules to purchasing a home. You have to face tough competition and adjust to new tax reform codes that are in place. Whether you’re a first-time home buyer or looking for your second, third or fourth home, the tips discussed in this article will help you overcome the challenges often experienced when purchasing your dream home.
Knowledge of what awaits you means you’ve at least won half the battle. Here are five tips to purchasing your dream home in 2018:
Top 5 Tips to Successfully Purchasing Your Dream Home
1. Choose What You Can Afford
Buying and selling homes can be an expensive affair because lots of money is involved, but if you’re able to buy you’re own land to build a home on, why not look at the Castle Rock land for sale. Before paying for a home, it is important to first figure out what you can afford in terms of down payment and payments made on a monthly basis. Most down payments for homes are usually 20% of the original home price.
Do not spend more than 30% of your income on your housing. When doing your calculations, include all your bills and responsibilities such as debts. The rules and restrictions of homeowners associations affect certain areas. Breaking the rules would mean you have to pay fines.
Some associations require contribution of monthly maintenance fees besides the normal monthly mortgage. Even if you don’t see such on a home listing, never assume that it isn’t there. Don’t forget tax and insurance costs for your home. Unless you are a medical professional, in which case you may not be required to pay mortgage insurance. People in the medical field can go to companies like LeverageRX to help them get a mortgage appropriate for them
Additionally, if you plan on building a custom home from scratch, you should also take extra care when working out your budget. One of my friends has recently moved to Australia and is currently a new home builder with Aaron Martin Construction. Building your dream home is an amazing prospect and can be a demand on your time and finances, so it is crucial that you do as much research as possible before you commit to any major decisions.
2. Are Your Credits in Order?
A bad credit score can negatively affect your chance of getting a mortgage loan. However, there are many things you can do to improve your credit score. For instance, check your credit report for any possible mistakes and correct them through proper credit management.
Make loan payments on time and in full amount as agreed. Your credit card should never be maxed out. Different lenders have different criteria they use to define excellent, good, fair or bad credits. In most cases, excellent credit is ranked between 781 and 850 while good credit between 661 and 780.
If you’ve never had a credit card or loan, that might also be affecting your rating as you’ve never had the opportunity to build credit. If you’re wondering “can I get a credit card with no credit?” so that you can build credit, yes you can! And you should! As long as you’re responsible with the card.
You can always check your credit score from the credit bureaus such as TransUnion, Equifax or Experian. If you are an interested homebuyer, don’t wait till you’ve found a home to buy to work on your credit scores. Check your credit in advance.
3. Interview all the Realtors You Think Might be the Best for You
A realtor with many years of experience makes a homebuyer comfortable. Look for referrals or someone who knows and understands the price point and area you want. Interviewing different realtors is the key to finding one who understands or meets your needs. Browse your listing and choose affordable realtors able to meet your needs.
An agent can help you become informed, improving your experience. Most realtors have many lenders you can work with to get a mortgage loan.
4. Embark on Research to Know What You Want
Do your research online using websites such as Realtor.com or Zillow. They have listings for selling, purchasing or even renting homes. They can be accessed either through your phone or laptops. Information on agents and mortgage lenders can also be found on the websites.
There are many ways to find a home you can afford. Break down the purchasing process into a step-by-step procedure. Websites such as Freddie Mac’s My Home understands mortgage concepts and can calculate your mortgage finances and insurance.
5. Get Your Documents Organized and Preapproved
Purchasing a home becomes easy when you have all your documents organized and preapproved for mortgage. Pre-approval involves providing information on your financial history such as credit reports, bank statements, proof of income and assets and liabilities.
Personal information such as your driver’s license and Social Security numbers should also be provided.
Since the rules keep changing, purchasing a house can be a challenge. Even if you bought a house before and feel like you’re a master home buyer, watch out. What worked out for you or other people in 2017 might not necessarily work in 2018. It’s a whole new real estate world out there.