Written by Whenever you reach the point in your life where you are now able to afford a home, there is a lot to consider. Besides making sure you love the house you have chosen to buy, you need to make sure all of your affairs are in order. By following a few simple tips, you can ensure that the home buying process is swift and without unnecessary hindrances.
The most important thing you can do is make sure that you know what it is that you can afford. Becoming pre-approved not only shows sellers that you are serious about buying, but will also give you more negotiating power when it comes to the price of the home. This also saves you from looking at properties that are out of your price range. Not only is this greatly appreciated by the real estate agent you are working with, but it helps to have a solid number to work with. This way, you will not wind up stretching yourself out past your limit.
Remember, lenders look at your debt to income ration when determining whether or not to give you a loan. With this in mind, it is a good practice to not enter into any other debt. In fact, doing what you can to pay off current debt you already have will make your debt to income ration look more favorable to a lender. Different strategies are used to make you a more qualified buyer; most of them just require a little bit of planning and rearranging of assets.
Also, If you are planning on switching jobs, I would recommend doing so after closing on your new home. If you must switch prior to purchasing, do your best to make sure that you are moving upward in either pay, responsibility, or both. Lateral job transitions should be within the same industry. Steady employment is a major deciding factor in obtaining a mortgage.
If you own your current home, and are planning on selling that property along with purchasing a new house, make sure that you do not wind up sitting on two houses. This happens sometimes when your current home does not sell in the expected time period. The best thing to do would be to ensure that your old property is sold before you purchase your new home. Even if you have to rent for a month or two, this gives you more safety and breathing room than trying to time buying and selling together. Also, if you have equity in your old home, this may give you the ability to put more down on your new house, or pay off some of your other bills.
The home buying process can be a fun one, but can also be one that involves creative thinking and strategizing. Other than consulting with your mortgage professional, the best thing you can do is understand your spending limits prior to beginning your search for a new home.
