Posts Tagged ‘buy a house’

You have made that all-important decision to buy a house.  Your dream is finally close to becoming a reality. Once the decision is made, the real work begins. It is important to get your finances in order.

Pay Down Your Debt

When you begin the process of looking for a lender, you will find that most want your total debt to be no more than 38% to 40% of your gross income.

For example, is your income is $3000 a month, and then the bank figures your total debt can be $1240 a month. If you already have $1000 in debt, you will only have $240 left over for mortgage payments. By paying off car loans and credit cards, you will reduce this number and increase your borrowing power.

Begin with the highest interest items first, normally credit cards. Then, move onto student loans and lastly, car loans.

It is always a good idea to get into the habit of paying off your credit cards completely each month and never carry a balance. Few things can kill the dream of homeownership quicker than credit card debt.

If you are finding this difficult to do, then follow the rule of pay-yourself-first. That means, take 20% of your pay check to pay for something you really want or to put into savings. In this case, it is making a credit card payment.

If you take care of everything else first, you may never have enough to pay down your credit card debt.

Get the Down Payment Together

If you don’t already have a savings account, get one now. If you find it hard to save money, try the pay-yourself-first technique. When you get a paycheck, put a pre-established percentage into your savings account and then make certain you leave it alone while your down payment accumulates.

A seperate savings account for your down payment that will allow you to see what you are accumulating toward your dream of homeownership. You will be surprised at how fast the balance grows if you pay yourself from every pay check.

If you want to qualify for a larger home loan, you will have to make a large down payment to qualify.

Clean Up Your Credit Report

Good credit not only helps you qualify for a loan, it also allows you get a better deal when you do get the loan.

Lenders will look at your credit report. Bad credit doesn’t mean you will not get the loan, it just means you will have a much higher interest rate and you will be required to pay a much larger down payment than someone with a good credit score.

Credit Report vs. Credit Score

Did you know that your credit report and your credit score are two different things? Your credit report is a list of thing like your credit card and bank accounts, outstanding loans and you payment history. Your credit score is a rating of how good your credit is, based on your report. In other words, your credit report is a bunch of pages and your credit score is a number from 300 to 850. Pay attention to both of these if you have decided to prepare for homeownership.

Taking a few months or even a couple of years to get your finances in order will help you get your dream home.

So many people are thinking about buying a home bow but are unsure if it is the right time to do so.No really has a definite answer, but there are many theories that you can take into consideration.In the hardest hit areas of the housing crisis, you are more likely to see a rebound in prices sooner than lesser affected areas.

If you keep waiting for a bottom, you may end up missing it all together.

Interest rates are the lowest that they have ever been. Combine this with bargain home prices and you can end up owning a home really inexpensively.These great mortgage rates are likely to go up.If rates rise and home prices follow, you will be out of luck.

If you are planning to buy a home for the long haul then any further slight declines in home process shouldn’t concern you too much.

All in all, the market too me seems perfect for potential homeowners.The amount of available properties is huge.Prices are very cheap.And the cost of borrowing is as good as it has ever been.

Begin by doing a local real estate search where you live to determine where prices stand.Also, have your credit checked. You need to determine that there are no problems.If you have a bad credit score, start working on it immediately.

Go to your bank and find out exactly what the requirements will be for you to get a mortgage.

If you are prepared financially, you can act as soon as you find a house that you really want. You will also prevent any disappointments after you get into the process.

If you wait too long, you might just be kicking yourself one day.

It’s a constant question now in the real estate market: Is it a good time to buy a house? Of course it is difficult to answer in an article since you may be reading this years after it is written, when conditions have changed. But whenever you find this article, the following three crucial factors are what you’ll want to look at to answer the question for yourself.

Home Values

At the moment, the first thing most people are wondering when they ask if it’s a good time to buy a house, is whether prices have finally stopped falling. Since a home is seen as an investment of sorts, we all like the idea of buying when values are rising. I am writing this in early 2009, and no, home values not only are not rising in most areas, but they don’t seem to have stopped falling.

We just bought a home anyhow, and there are several reasons why we felt comfortable doing so. The first is that prices don’t seem to be falling much in our area (Canon City, Colorado). Apart from the various foreclosures that are dragging prices down a bit, the market here is much more stable than in other parts of the country. A stable job base and the fact that prices never rose too far too fast during the “boom times” helps.

The real estate market does not act the same everywhere in the country. So to see if a bottom is near or if prices are rising, pay close attention to what is happening where you are. On the other hand, we did not buy counting on rising prices, because that is not the only determining factor. In fact, it is possible that the problems in the country will get worse and drive prices down 10% or 15% even here. So what else made us decide that for us it was a good time to buy a house?

Interest Rates

At the moment you can get fixed rate 30-year mortgage loans at about the lowest interest rate in your lifetime (no matter how old you are). Our own rate is 4.5%. That’s not a variable or “teaser rate.” It is fixed for the thirty years of the loan.

Let’s look at why this matters so much – as long as you plan to stay in the house for a while, as we do. Suppose you pass on a house that is selling for $200,000 and waited a couple years while prices fall another 10%. But suppose that at that time interest rates were up around 7.5%. You buy the house for $180,000. The payment (assuming you have a 10% down payment and borrow $162,000) is $1,132 each month for principal and interest.

But what if you had bought at $200,000 and put 10% down? Then your payment on the $180,000 loan would have been $912. That’s right, you would be paying $220 more each month if you waited and bought at the lower price. That amounts to $77,200 more that you would pay over the thirty years if you stayed in the house that long ($79,200 more in payments, but you saved $2,000 on the down payment). This demonstrates the importance of the interest rate in determining your true cost.

Personal Situation

Is it a good time to buy a house, then? That depends not only on prices and their direction, and not just on interest rates, but on where you are financially. How secure is your income? If you lost your job, could you make the house payments for six months while you looked for another? Can you count on finding another job that will provide enough income to pay for the house? Are you going to be staying in the area long enough to justify buying (renting can often make more sense if you will be moving within a few years)? These are the more difficult questions to answer, but perhaps the most important in determining if it is a good time for YOU to buy a house.

Are there other options?

Answer:
With $800k, you should be able to buy many rentals and the rent is a sure thing, as opposed to purchasing a franchise with only a 10% chance of success. 9 out of every 10 franchises fail within the first year, and the investor looses his money. Using the 25% down payment rule for non owner occupied property, you should be able to purchase $3.2 million in property. In seven years or so when you sell, you should recieve around $3 million, that is a really nice return.

my fiance wants to buy a house but doesn’t know if he will be approve for a loan. should we get married first?

Answer:
It depends on your particular situation. You combined income may be higher if your are married, but at the same time if your husband has a lower credit score than you…he will only hurt your chances of getting a good loan.

Should buy a house for $20,000 more than your current house and go to a school ranked about 300 in all U.S schools, or stay at a school that it ranked about 1000 in all U.S schools? By the way, the house has 3 bedroom and 2 bathrooms and is priced around $650,000. It’s also not a new house. i’m asking for your opinion!!! plz it’s very important!!!!!

Answer:
i think that if you’re really that concerned about your education, you could use those 20,000 dollars to do SO much stuff for educating yourself like…hire a personal teacher for a specific coarse, buy books, enroll in some specialized educational institution but i highly doubt that you’re actually just considering on buying this house just because the school’s ranking…trust me when i tell you that even if you go to the top 50, you won’t get better education than from a personal conviction to learn and having the resources available