Ready To Buy A Home? These Signs Coming From The Best Title Company Tell You Yes!
Before buying a home, there are things you have to check off your list and the things you need to know especially when it comes to mortgage loans or title policy. It may sound simple when you are thinking of purchasing a house, but you can quickly get stressed when you don’t know the right processes and the things that you have to do. Make sure to do your research first and learn from the best title company. As such, we have created this article to help you.
Here are the signs that tell you're ready for a home purchase.
Your Debt-To-Income Ratio is kept to a minimum
If you plan on a home purchase with the help of a home loan, then keep in mind that you'll need to show that you're able to pay on time. Various mortgage types are available for first-time homebuyers - one of which are FHA loans. You'll need to have a DTI Ratio between 31%-41% only to qualify for an FHA mortgage, not to mention other requirements needed to get approved.
Your Credit Report is free from error, and you have a high credit score
Your credit report shows all of your past credits from different sources, your current dues, your credit activities and situation. So, make sure there are no errors and to file a dispute if you find any. Your credit score is a number your lender will check to see how much of a good payer you are. Make sure you pay your dues on time, to refrain from applying for new credits and to avoid expensive buys before getting approved for a home loan.
You have a steady flow of income
Job stability is essential for a home loan application as it shows you have a steady flow of income. One needs to prove to your lender that you're capable of paying them back by staying on a good-paying job for at least 24 months. Why? They usually ask for two years worth of proof of income. So, make sure you stay on your job and to list all of your income sources.
You have enough cash to pay for down payment and more stored at your savings account
One also needs to have not just a significant amount of savings, but enough money to pay for the down payment. While some home loans allow little to no down payment, it would be best to save up both for your DP, savings and emergency funds. Your savings should be different from your emergency funds as you'll need a separate amount of money in case of emergencies, house maintenance, and repairs, etc.
You plan on living in that home for more than five years
If you have no plans of transferring to a new home, state or country for the next few years, then you're ready to buy a house. A home purchase is an investment and a long-term commitment. Since most home loans can last up to 30 years or more, you'd need to stay long-term so that you won't lose your investment.
You are not Required to Own Your House
You don’t have to buy a house and own it to call it home. You can choose to rent a house especially when you are one who likes to move around or travel a lot.
Change is Constant
Sometimes, when you tell your friends and family your plans, they will be giving you a lot of advice. Be careful when choosing which advice to follow since the principles of the real estate market is always changing. What may be right years ago may not be true nowadays.
Check Out Any Issues Before Purchasing
Before you decide on buying your dream home, you have to take the time to check everything. Make sure that the title is clean and you won’t have any problem with taxes in the future. Check with the best title company for some essential things you need to know. Then, smell if there’s any mold, knock on the walls to see if they are hollow and look for any pests. Does the toilet work? Does the air-conditioning system need any repair? Is the water pressure good?
Only Work with Professionals
When it comes to home inspectors, mortgage lenders and brokers, you should only choose the professionals. Also, always check that you and the seller don’t have the same lawyer. This will help you avoid any future conflict. Lastly, make sure you know the home loan requirements before working with mortgage lenders.
Negotiate, Negotiate and Negotiate
You can choose to have an agent arrange things, or you can negotiate personally. You have to know and feel that you are in control when you are buying a property.
Use Your Head
Don’t use your heart and know when to walk away from any bad deals. There will always be more properties that you can check which may be better than the one you chose. You have to keep in mind that your terms should be met and that the deal is a financial transaction. It’s not as simple as buying an earphone from the store or purchasing groceries. The property that you are choosing might be the place you’ll spend your whole life in so choose wisely and don’t get carried away.
Choose Ones that You Can Afford
There are many calculators online that you can choose to help you determine your budget. Always make sure that when you are borrowing money, see to it that you can afford to repay it so you can avoid getting buried in debt.
Take your circumstance into consideration. Your new cars, future travels, kids and schools are included in the substantial costs. Ensure that there is always room for a budget so you can still live the life you have always wanted.
The Search Can Take Longer
Choosing and looking for the right property may take you a few more months compared to what you have anticipated.
How can one determine whether or not you're ready for a home purchase? While it's part of the American Dream, there are many things to consider before you can safely say you're prepared to buy a house. Just because there are lots of affordable options out in the market today, you can already jump into the pool of first-time homeowner wannabes. There are lots of factors to consider - not just the low down payment fees and interest rates.
By: Robert Viggiano – 15 Years of experience in Title Insurance and Sunnyside Title Insurance President.