what everyone should know when considering buying property
Whether you are a first time home buyer or a seasoned investor their are three factors that you must consider when purchasing a property: 1) Money 2) Credit and the most important of all ... 3) MONEY.
1) Money: Your money or monthly budget determines how much house you can afford .
2) Credit: The better your credit the less money you'll actually need.
3) Money: The more money you have the less you have to worry about the first two.
Now that you know the three factors it looks simple, but lets examine each factor closely.
Most important before going out to look at any property " DO YOUR HOMEWORK ". The first step in your home work is...
Get Your Money Right. Get prequalified, this is something simple you can and should do yourself. Prequalify is just a glorified term for finding out how much house you can afford based on your verifiable income and standard debt ratio limits.
It is common to get prequalified and preapproved mixed up but their is a big difference in which i will explain later.
Make a Budget. Sit down and get a picture of your overall budget. Make a list of all your current bills and obligations and then compare it to what it would be based on your prequalifing figure. This should determine whether the prequalifing amount fits into your overall budget.
Credit is worth its limit in Gold. The better your credit the less money you'll actually have to need. Having good credit leads to lower interest rates which equals lower payments and better loan programs which give you lower down payment guide lines.
Know your credit score and what it means.
Do the necesary credit repair to strenghten your score
- A middle score of 575 to 580 with no collections/ charge offs, or lates in the last 12 months will usually quality you for a standard FHA loan.
- While you are going through your credit and doing your repairs make a wish list of locations and features you want in the house you will purchase.
Money is the end all be all. The most important factor in purchasing a home or any real estate is the money. The more money you have for a down payment the less favorable your credit has to be. If you have enough money forget credit just pay cash.
Congraulations, You've done your home work
Go get Pre-approved. A pre-approval is the process in which a lender or mortgage broker pulls your credit profile and gathers your income information to make a loan decision.
Once you have done your home work; you know how much house you can afford, you know your credit score is in good standing, and you're pre-approved. You are now ready to find a property. Get your approval letter and decide whether you will use an agent or will find a property on your own, either way time to go house shopping.
