Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

How to be Financially Prepared When Purchasing Your First Home

Housing-Market / How to Guides Apr 26, 2018 - 02:58 PM GMT

By: Submissions

Housing-Market

Getting ready to purchase your first house can seem like a daunting task. You need to take into account credit scores, mortgages, and down payments. Below is a simple guide that will ensure you are ready to make one of the most significant purchases in your life.


Determine How Much You Can Afford

The first thing to do before adding a house to your investments portfolio is making sure that you are ready. In general, you should expect your home to financially pay you off after you’ve lived in it for at least five years. On the other hand, there’s nothing wrong with renting now, depending on your financial position.

While it’s not always viable living in an expensive real estate area, you should always strive to keep your housing payments at below 30 percent of your monthly gross income. Spending more than that may make you “house poor” – a situation where you’re living in a beautiful home but can barely keep up with monthly expenses.

Preparing Your Finances for the Mortgage Process

The real frustration is finding your dream house, and discovering you are not qualified financially to purchase it. Before buying your first home, ensure that you are financially ready by having good credit, a verifiable source of income, and cash to close the deal.

For starters, getting a mortgage requires you to have an ok credit score. It’s always a good idea to check for errors in your credit reports regularly. Go a step further and invest a couple of months in a daily credit score monitoring service.

Apart from ensuring your credit score is in order, you need to ensure that you have cash ready. Of course, there’s the down payment, which is typically about 3.5 to 20 percent of the home’s purchase price. If you need help, services like down payment assistance programs are available to ensure you have the money ready whenever you need to buy a house.

As you get closer to placing an offer on a home, gather documents you will need to verify finances during the mortgage application process. These include bank statements, W-2’s, paystubs, and if you are on self-employment or freelance pay, copies of your latest two tax returns.

If you intend on putting down anything less than 20 percent, a lender will presumably charge you a premium called Private Mortgage Insurance (PMI). The PMI protects your lender in case you default on the loan, and your home’s value plummets significantly.

Shop for a Mortgage

Many times, prospective homeowners delay looking for a mortgage product until the last minute, and they lose their dream houses to other bidders due to lack of financing. Fortunately, serious buyers can get free and non-binding mortgage pre-approval.

Comparing different mortgage products is confusing. You need to consider adjustable and fixed rates, which are often priced differently. You also have the option of taking on a 30-year mortgage or one as short as five years – expect higher interest rates on longer-term loans.

Fixed-rate mortgages are the best for many homebuyers, and within them, the 30-year fixed-rate home loan is by far the most common type of mortgages. However, it doesn’t hurt to investigate further how mortgage interest rates work, affect you, and the different kinds available. You might also consider running different scenarios through online mortgage calculators to get a feel for different rates and terms and how they correlate with monthly payments.

Summary

Purchasing your first home can be one of the most exciting, and stressful, moments in your life. However, once you have the right information, you can shop for a home, apply for a mortgage and close a deal with confidence.

By OutreachMama

© 2018 Copyright OutreachMama.com - All Rights Reserved

Disclaimer: This is a paid advertorial. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules