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5 Home Buying Essentials
Purchasing a home involves certain important, even essential, steps that every buyer should take before closing on a purchase. Let?s examine these ?essentials? which, if properly implemented, can help you save valuable time and aggravation.
1. Determine What You Can Borrow. Sure, if you know your interest rate and the length of the loan you can pretty much determine your monthly payments, right? No! You must include your property taxes, homeowners insurance, and association or maintenance fees, if applicable. These ?added? costs can significantly contribute to higher monthly payments. No lender will give you a loan without figuring these costs in.
2. Know Your Fees. Closing costs can add up to the tune of several thousand dollars. Title searches, realtor fees, loan applications, attorney fees, and legal fees must be taken into consideration. Many states require lenders to give to borrowers a ballpark figure of what these costs will be.
3. Shop For A Loan. The longer you plan on staying in your home, the more likely you will want a fixed rate mortgage. If you are planning on a short stay, a variable rate mortgage may work best for you. Consider an interest free mortgage if you basically plan on ?flipping? the home in one or two years. Of course, you had better hope that your home appreciates significantly in that time otherwise you may find yourself owing more than what you originally paid for the house!
4. Get Pre Approved. Realtors and sellers will take you seriously if you are pre-approved for a loan. In some cases the pre-approval will not only swing a deal your way, but you could find the sellers are more receptive to lowering their price if they believe you are a serious shopper.
5. Negotiate. You may not be able to get the seller to drop the price of their home, but you may be able to get them to sweeten the deal by including certain extras. Air conditioners, refrigerators, washers, dryers, ceiling fixtures, and window treatments are some of the things that add value to your purchase. If extra items are included in the sale, then your later pay out for these items will disappear.
In all, if you are a thoughtful and savvy shopper you should be able to save money on the purchase of your home by following these five essentials.
Home Loans For People With Bad Credit - When you Should Wait and When You Should Get a Home Loan
Home loans may seem like a bad idea for people with bad credit, but there are times when a home loan can help your credit score and your budget. To know if a home loan is best for you, consider factors such as your current financial situation, current rent payment, and future goals.
Raising Your Credit Score
Home loans build up your credit score when you make regular payments. Unlike credit cards or short-term loans, a home loan shows your long-term responsibility. With a higher credit score, you can then refinance your mortgage for a lower interest rate.
However, if your financial situation is currently shaky, it is better to wait to apply for a home loan. You don?t want to risk a lower credit score with missed payments. A better idea is to pay off short-term debt and save for a down payment on a house.
Building Equity
With your own home, your monthly payments are investments in your home. Through mortgage payments, rising real estate prices, and sweat equity, you can watch the value of your home rise. If you are paying rent, you are building equity for the landlord, not yourself. The better financial choice is to buy your own home or condo rather than pay rent.
If you are planning to move out of the area soon, then it is best to wait to purchase a home. Closing costs and realtor fees can run into the thousands. If you are not in your home for more than two years, then it is unlikely you will recoup these costs when you sell.
Planning Future Goals
Owning a home is as much a lifestyle choice as a financial choice. So deciding when to purchase a home should be based on your future goals. Are you ready settle down and put the time into maintaining a house? Or do you not want to worry about it and let the landlord handle those major maintenance projects? Just remember that you are trading money for convenience.
When considering buying a home, think about your current financial situation and your future lifestyle goals.
To view our list of recommended bad credit mortgage lenders online, visit this page: Recommended Bad Credit Mortgage Lenders Online.
7 Credit Improving Steps You Must Take Before Applying For A Mortgage
If you think you have good credit, think again. Chances are there is something on your credit report that can effect your credit rating; this type of news is particularly alarming if you are shopping for a loan or applying for credit. You can save yourself headaches as well as thousands of dollars by implementing the following seven credit improving steps.
1. Do not charge your cards to the limit. Yes, your credit line is whatever the credit card company determines it should be. Still, if you max out your credit cards your credit rating will suffer.
2. Check your credit reports. The three major reporting agencies are TransUnion, Experian, and Equifax and they all must offer to American consumers one free credit report per year. Not all states are covered by this policy until September 2005, so check to see if you are eligible now. Errors are common, so make sure you identify them and take the proper course of action to have incorrect information expunged from your report.
3. Pay off your credit cards. Your credit will improve if your outstanding balances are paid off especially before you apply for credit. Consider consolidating your outstanding balances into one low monthly payment.
4. One stop rate shopping. Too many mortgage applications over a lengthy period of time can reduce your credit rating. Best bet: shop online and get the mortgage companies to bid on your loan. Choose one company and only apply to them.
5. Use reputable lenders. If you borrow money from less than reputable lenders, including some finance companies, you may be penalized even if you have repaid the loan. Using a finance company can be a signal to lenders that you are a credit risk.
6. Wait to purchase household goods. If you are planning to purchase major appliances for your new home, do not make the purchase until after your loan has been approved. A spike in spending could derail approval of your mortgage loan.
7. Overcome a history of bad credit. If you have a previous history of bad credit, do not apply for any loans within the first year immediately after your credit rating is at its lowest. You will need the one year period to build your credit rating back up. Should you apply and are accepted within that first year, chances are your mortgage rate will be higher and that could cost you thousands of dollars over the life of your loan.
Lenders are eager for your business, so even if your credit rating isn?t that great you may qualify for a lower rate mortgage especially if other factors weigh in, like your income level. Still, consider taking whatever steps necessary to improve your credit rating before you apply.
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