Your First Home Loan: What You Need To Know
So you've decided to buy a home. Perhaps you're a newlywed, and you and your spouse are starry-eyed and off to pursue the American dream. Maybe you're a disgruntled renter, tired of throwing away your hard-earned money every month. Perhaps you're a savvy investor looking to turn a buck off the white-hot housing market.
Whatever your reason, you're ready to buy, and you're ready to buy now. Purchasing a home can be a wonderful, weird, and intimidating experience sometimes all at once. But by following a few simple steps, your transition from renter to buyer can be a smooth one.
Give Credit Its' Due
It can be pretty tempting to pick up the Sunday newspaper and search for the home of your dreams, but before you even take the rubber band off of that edition, you've got to get your credit in order. There are three major credit agencies who keep track of your credit record Experian, TransUnion and Equifax. Each of them have a credit rating for you on file, and when averaged out, you'll get your credit score. Check each of these resources independently there are several online resources where you can purchase all three credit reports at once and make sure to correct any inaccuracies and check for identity theft. If there are errors in any of your reports, it could take a couple of months to fix them.
Know Your Limits
If you're a young, first-time homebuyer, chances are pretty good that that 5,000 square foot, eight bedroom villa on the river bluff is out of your range financially. What you need to know before moving on is exactly how much house you can afford. The general rule is to look within a price range of about 2.5 times your gross household income. For a more accurate range, you can get pre-approved by a lender. They'll give you a better idea of the right figure by measuring your income, debt and credit.
Get Down With The Down Payment
Whatever your reason, you're ready to buy, and you're ready to buy now. Purchasing a home can be a wonderful, weird, and intimidating experience sometimes all at once. But by following a few simple steps, your transition from renter to buyer can be a smooth one.
Give Credit Its' Due
It can be pretty tempting to pick up the Sunday newspaper and search for the home of your dreams, but before you even take the rubber band off of that edition, you've got to get your credit in order. There are three major credit agencies who keep track of your credit record Experian, TransUnion and Equifax. Each of them have a credit rating for you on file, and when averaged out, you'll get your credit score. Check each of these resources independently there are several online resources where you can purchase all three credit reports at once and make sure to correct any inaccuracies and check for identity theft. If there are errors in any of your reports, it could take a couple of months to fix them.
Know Your Limits
If you're a young, first-time homebuyer, chances are pretty good that that 5,000 square foot, eight bedroom villa on the river bluff is out of your range financially. What you need to know before moving on is exactly how much house you can afford. The general rule is to look within a price range of about 2.5 times your gross household income. For a more accurate range, you can get pre-approved by a lender. They'll give you a better idea of the right figure by measuring your income, debt and credit.
Get Down With The Down Payment
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