October 11th, 2017 5:51 AM by Jackie A. Graves, President
a house is a life-changing process that requires lots of upfront financial
looking for a home, keep certain factors in mind, including your financial
situation, types of available loans, your credit score, the price of the house
and your down payment so you can navigate the process smoothly.
Your financial situation
you buy a house, make sure that your monthly budget can handle such a large
expense. Unless you’re one of the few people who can pay cash for a home,
you’ll likely be paying it off for 15 or 30 years, depending on the length of
addition to the mortgage payment, you’ll want to factor in expenses like
property taxes, homeowners insurance, property taxes and routine maintenance.
Bankrate’s calculator to see how much house you can afford and
estimate the mortgage amount that fits your budget.
Types of mortgages
buying a home, you have a few options for the type of loan you
want to use. Two of the most common mortgage types are fixed-rate and
Fixed-rate mortgage: The
interest rate on a fixed-rate mortgage stays the same over
the life of the loan, with payments divided up into equal amounts that you pay
on a monthly basis. The longer the loan term, the less you have to pay each
month. However, you’ll likely pay more in interest than you would with a
also need to review your credit score before buying a house. Your credit score
helps creditors determine your creditworthiness. Borrowers with credit scores
of 740 or higher generally qualify for the best mortgage deals.
still possible to buy a house if you have bad
credit. You likely will have to accept a higher interest rate on
your mortgage, which could cost you hundreds of dollars extra per month.
your credit score drops too low, though, you might not qualify for a mortgage
at all. Consider improving your credit score first before trying to buy a
house. You can check your credit report and scorefor free
The price of the home
higher the price of the house you want to buy, the more you can expect to pay
on a monthly basis. When looking at houses, consider your budget and how much
you can afford to spend.
to consider your needs, too. Do you have a new addition to the family and need
the room? Have your kids moved out and you want a smaller home?
take a look at the price range of the houses available in the area where you
want to buy. Compare the prices you find to your budget and determine what home
you can afford.
The down payment
large down payment represents
one way to reduce the monthly cost of your mortgage. As a matter of fact, a
down payment of 20 percent gives you access to better interest rates and
prevents you from having to pay private mortgage insurance. So, in addition to
lowering the amount you owe initially, a down payment also can get you a lower
interest rate, making a house more affordable.
By Cheryl Knight - To
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