A home purchase is often a tricky process. This is why you must be highly critical in your home buying journey and purchase decision if you want to acquire your dream home. Even if you have the money or mortgage lenders are readily available, it doesn’t necessarily mean that you should immediately take the plunge. There are a few considerations to make to increase your chance of buying a residential property and getting the right one.
Guide to Boost Your Purchasing Power
If you’re a first-time homebuyer, here are five ways to boost your purchasing power:
- Settle your existing debt(s). The initial step to take is to pay off your debts before you decide on buying a house. This is because it doesn’t make sense to get a property if you’re still indebted. The last thing you’ll ever want to happen is to have all your debts spiral out of control and get you into the bottomless financial pit. Even if you consider getting a mortgage, your chance of getting approved will be slim if lenders determine that you have unpaid debts.
- Improve your credit standing. It’s best to look at your credit report and assess your credit standing first. That alone will give you an idea about whether or not it’s the right time to consider buying a house. If you have a relatively low credit score, you should first build your credit standing over several months or years. Even if you’re going to get a mortgage to finance your house, lenders will check your credit history before deciding whether or not to lend you money.
- Prepare your down payment. Another important consideration is to save money for the down payment, particularly if you’ll opt for a conventional loan. Keep in mind that most banks or lending institutions will require a 12-percent down payment. However, suppose you are qualified to obtain a non-conventional mortgage such as the Federal Housing Administration (FHA), Veterans Administration (VA), or the United States Department of Agriculture (USDA) loans. In that case, you won’t have a problem with your down payment.
- Get a mortgage pre-approval. Once you have factored in all those mentioned above, you should get a mortgage pre-approval before searching for a potential property. As such, be sure to shop around for prospective lenders, compare their offers, and settle for the most suited one for you. Not only should you consider the interest rate alone, but you’ll also have to consider various factors, such as the loan term, escrow account (for taxes and insurance), and the total monthly contractual payment (MCP). If you plan to pay for the entire house out of your own pocket, only then you won’t need to get a pre-approval.
- Be highly selective in buying a property. At this juncture, remember that you can look for potential residential properties with a real estate agent’s help. Once you’ve been pre-approved for a mortgage, you will be more confident in finding a property that will be covered by the money you receive. However, always remember to be highly critical and selective of your property purchase by doing your homework, having property viewings, conducting home inspections, and allowing your realtor to negotiate for a better deal. All these steps will increase your buying power without compromising your family’s needs!
Buy a Home in Roseville with Steelman Mortgages
A home purchase is one of the best decisions you’ll ever make in your life. Whether you plan to get a mortgage to finance your house or pay it with your own money, be sure to consider all the practical tips mentioned above to increase your buying power. With all these in mind, you’ll end up buying the dream house that you and your family deserve! We’re a mortgage broker in Roseville that helps individuals find the right home loan, whether buying a new house or refinancing a mortgage. If you’re looking for a home loan to help finance your home purchase, get in touch with us today at (916) 847-7263 to schedule an appointment with our loan officers!
