Thursday, July 13, 2017
Buying your first house is a big decision. Whether you’ve planned for this milestone for years or are just starting to consider your options, there are four important factors to consider before you start house hunting.
Know your credit score Having an average credit score instead of an excellent one could be the difference between one or two percentage points on your interest rate. That could translate to hundreds of dollars of savings a month. If your credit score is lower than you’d like it to be, you can try to improve it by paying off debt. If you haven’t built up much credit, consider getting a new credit card, making your payments on time and paying your balance in full.
If you’re in the market to buy your first home, you should know your credit score. It’s one of the most important factors when it comes to securing an attractive interest rate on a mortgage loan.
Determine your budget
There’s nothing worse than falling in love with a house only to realize that it doesn’t fit your budget. One way to bypass that disappointment is to set a realistic budget for yourself before you even begin browsing for houses online. Keep in mind that your monthly payment will include more than just mortgage interest and principal. Make sure you include property taxes and homeowner’s insurance in your housing budget.
Once you set a realistic budget, don’t budge. Look only at houses that fit within your range to be sure you fall in love with a home that you know you can afford.
Learn the terms
Become familiar with some of the terms you may encounter during the home-buying process. Sites like Realtor.com do a great job of defining the home buying terms you’ll want to understand before putting a bid down, negotiating or doing a mortgage comparison to find the loan that’s right for you. For example, you should know the difference between a fixed-rate mortgage loan and an adjustable rate mortgage (ARM) loan before you make your final financing decision. Learn more about which type of mortgage may be best for your situation.
Find the right financing
Lastly, you should find a mortgage loan with the terms, rates and features you’re looking for. Once you do, get conditionally prequalified. If you make a bid with financing already lined up, the seller will be confident that you’re serious about wanting to buy the house they’re trying to sell.
There are many factors to consider before buying your first house. Whether you have questions about borrowing or want to compare mortgage loan options, we’re here to help walk you through the process. We also offer helpful mortgage resources to help you find the borrowing solution that’s right for you.
Courtesy of Nationwide