Homes are huge investment thus there are certain things one needs to do before buying one. The simple steps of buying a house include; improving one’s credit score, figuring out what you can afford, saving for down payment or closing costs, building a healthy savings account, getting pre-approved for a mortgage and finally buying the house you like. In improving your credit score one is able to get the best deals in terms of paying down payment and also have the best rates on the market. In order to purchase a home the step on figuring out what one can afford is by using a bank rate calculator. Apart from using a bank rate calculator to calculate what one can afford the housing expenses are also included and they are insurance, utilities and taxes.
Saving for down payment or closing costs involves an individual needs to save between three percent and twenty percent of the house price for a down payment. An individual’s credit history and loan terms determines how much they need to come up with. If coming up with the down payment is hard then one can look for down payment assistance, first time home buyers and home buyers assistance. The down payment assistance is usually based on location or for particular buyers such as first time buyers. A portion of the closing cost can be paid by sellers in a buyer’s market as they can negotiate this. The fourth step is building a healthy savings account in order to assure the lender that you are not living pay check to pay check.
The money saved helps in paying for maintenance and repair of the home while at the same time individuals are given more latitude on criteria if the backers and the lenders see that one has a cash cushion. Most home repairs are sporadic but there are some which are a huge deal and they include new roof fixes or water heater fixes which come up suddenly and drain your budget. By assuming that they’ll spend 2.5 to 3 percent of the home’s value each year on upkeep and repairs then individuals are able to build health savings.
Getting pre-approved for a mortgage is the fifth simple step that follows building a healthy saving account which means that before shopping for a house one needs to get their finances in order. Before walking through the first house one needs to have a mortgage pre-approval so as to know how much they can afford. In determining how much one can afford to buy a bank rate calculator is used. The finally step is buying the house you like in which short term home ownership is quite expensive as its dependent by how much one puts down and what it costs to sell the old hose and move.