All across the United States, there are millions of individuals looking to a purchase a house - either now or in the future. Over the last few years, lower interest rates have come along, making it more affordable than ever to purchase a house. When most individuals stop and give it some thought - purchasing a house makes a lot more sense than renting a house or an apartment.
In order to purchase a house, you’ll need to start saving your cash and have enough for the closing costs and a down payment. Your down payment will normally need to be around 15% of the price or the value of the property - whichever is lower. To be on the safe side, you should always try to have 20% to put down. If you aren’t able to put 20% down, you’ll need to purchase some private mortgage insurance, which will cost you more in terms of your monthly payment.
In most cases, the closing costs will run you around 5% of the property price. Before you purchase the house, you should always get an estimate. An estimate won’t be the exact price, although it will be really close. You should always plan to save up a bit more cash than you need, just to be on the safe side. It’s always best to have more than enough than not enough.
You’ll know your ready to purchase a house when you know exactly how much you can afford, and you’re willing to stick with your plan. When you purchase a house and get your monthly mortgage payment, it shouldn’t be any more than 25% of your total monthly income. Although there are lenders out there who will say that you can afford to pay more, you should never let them talk you into doing so - but stick to your budget instead.
Keep in mind that there is always more cash involved with a house other than the mortgage payment. You also have to pay for utilities, houseowners insurance, property taxes, and maintenance. Owning and caring for a house requires a lot of responsibility. If you’ve never owned a house before, it can take a bit of time to get used to.
Before you fill out any applications, you should always look over your credit report and check for any errors. Although you may think you don’t, you can easily get an error on your credit report and not even realize it. If you have an error on your credit report, it can cost you a lot of cash in interest rates. An error will decrease your credit score, which will put you in a higher interest bracket and ultimately cost you a lot more cash in the end. Therefore, you should always know your credit before you approach a lender.
If you check your credit report early enough, you may leave yourself enough time to fix any problems and get your credit back on track. Rebuilding credit can take time though, sometimes even years. You should always plan ahead - and give yourself plenty of time to fix your credit.
Purchasing a house will require a bit of commitment on your behalf. You should always strive to get the best possible deals, which means realizing your credit and where you stand. This way, you can get the best interest rates. You don’t want to purchase a house with bad credit, simply because you’ll pay a lot more cash for the house. If you take the time to fix any credit problems and save up some cash - you’ll be able to get a much better house for your cash.