Buying a home is a huge decision. The financial requirements can make your heart beat a little faster every time you think about it. If you are not sure whether you will be able to get adequate finance to buy your dream home, this guide will set you on the right path to obtain the money you need to buy your new home.
1. Set a price range for your home
Begin by setting a budget for your new home. You need to be sure of what your home needs are and the price you can pay to meet them. Ideally, you should limit your budget to between 28 to 36 percent of your total income. Bear in mind that you will also need to pay for other related expenses in addition to the monthly mortgage payments. You can use an online calculator to get an estimate of the amount you will need to pay monthly.
Setting up a suitable price range for your new home will help you to save a lot of time. You won't waste time looking at homes that you will not be able to finance. Ideally, the type of house you can afford should be in line with your current financial status rather than the price fluctuations in the real estate market.
2. Check your credit history
Lenders will examine your credit score and credit report carefully before setting the interest for your loan. A high credit score will enable you to get a lower interest rate. In contrast, lower credit scores will attract a higher interest rate. This is because a home buyer who has a great credit score poses a lower risk to the mortgage lender. To improve your credit score, take these steps:
* Request a credit report from any of the major reporting agencies including TransUnion, Experian and Equifax. (You are entitled to a free report once a year).
* Check for any errors and write to the reporting agencies to correct the mistakes.
* Pay up all credit card debt and avoid using credit cards until you take your home loan.
* Don't close your old credit card accounts after you have paid off the balance. The longer the age of your credit accounts, the greater the value they add to your score.
* Ensure that your debt to income ratio does not exceed 36 percent.
3. Consult an expert
You will get through the home loan comparison and approval process faster if you consult an expert. Instead of spending days, weeks and months trying to find the best lenders in your state or region, why don't you consult a home loan specialist?
Specialized lenders which are partnered with a large number of banking institutions offer online search tools which will find the best possible interest rates available, tailored to your unique financial situation. Using their online application process you can securely upload and verify your documents, after which you will be guided through the process of getting your loan approved in the quickest time possible.
You will get answers to all your questions on home financing and you can access data on home loan rates from available lenders that might take you several months to gather on your own. Working with an expert helps you to avoid getting stuck with a bad loan for the foreseeable future.
4. Increase your savings
Every mortgage loan requires an initial deposit or down payment. This money should be 20 percent of the loan amount. But if you don't have up to 20 percent of the loan amount, you may still be given the loan. But you will have to pay private mortgage insurance which will increase your monthly payments. That is why you need to start saving as much as you can now. Open a new account which you won't withdraw from until you achieve your savings target. You can set an automatic withdrawal order on your salary account to help to save a fixed amount every month.
5. Get pre-approved for your loan
Getting pre-approved for your home loan is one of the most accurate ways to discover the price range of homes that you can afford. Your mortgage company will do a detailed analysis of your income and debts before setting a maximum amount for you to borrow. But this is not the full story. Always remember that every home loan opens up new expenses such as home improvements, higher property taxes and of course homeowners insurance.
6. Research the location
The neighborhood can greatly affect your home's future value. It will also influence the comfort, health and success of all family members. So how do you find out whether the neighborhood will be a good one for you?
* Drive around the area during the week, and on weekends, at different times of the day.
* Take some notes about the things you like and those you don't like (is it a noisy street? How frequent is the vehicle traffic there?)
* Find out how long it will take you to drive from your neighborhood to work.
* Research the quality of the schools in the area.
* Look at the proximity to major public transportation terminals and routes.
* Contact the homeowners association
7. Look at prices of similar homes
After you have found a home that you really like and the seller tells you their price, you shouldn't start negotiating instantly. Take time to find out the price at which similar homes in that location were sold recently. Find out whether the amenities in the home are on par with those found in other homes. You may also consult a property inspector to help you inspect the home and reveal any parts that need repairs. The seller must be ready to factor in these repairs into the price or carry out the needed repairs before you agree to buy the home.
With the above information, you now have some ideas on how to go about the financial aspects relating to the purchase of your new home. Take positive steps to write up a budget, improve your credit score and approach a lender for a loan pre-approval - and then you can start looking at vacant homes in your chosen neighborhood.
That will cause a financial setback.
But, by planning your payments smartly and taking a short term online loan, you can tackle the high-interest rate.
In India, only an NBFC or a bank is allowed to lend money.
If you do not have health insurance and have meager savings, then a sudden need for money can leave you helpless.
Your family and friends want to help you but are unable to because of their financial obligations.
Since the repayment tenure is short, it can help you pay the loan back as soon as you receive your salary.
Sometimes it is very difficult to endure the financial strain we have levied upon ourselves..sometimes, situations throw us in such situations that we become absolutely clueless as to what can be done.
Usually, in emergencies, we tend to break emotionally, physically, and financially..emotional and physical support is what family is there for but financial support can sometimes be a burden.
Borrow from family members or friends: In case you find yourself in the middle of a financial crunch, you could surely contact your daily members or friends to lend you the cash you need..they might be able to help you.
But it might be a little embarrassing to borrow from someone known as they might judge you or even your relationship can be affected badly because of it.Bank loans: You can borrow money from banks in case you need some funds..but the paperwork bank needs to approve and render you the loan is pretty lengthy and tedious..also, you might end up getting rejected for the eligibility of the loan.
So, this option is not that suitable in emergencies.Filipino cash loans: You can get cash loans in an hour in the Philippines just by presenting certain documents that are required.
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