26 Sep Financing Your Dream Home
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Investing on a new property is a huge expense. It will take a major chunk of your savings. Here are a few tips on how to help finance your dream home:
1. Start Financial Planning: When you decide to buy a house, you should immediately start working on your finances. Buying a new house is a very expensive affair, hence, you should be financially ready for it. After you make your budget, you should start looking for properties within that price range.
2. Get your credit score: Before you buy yourself a new house, you need to get your credit information. Make sure that they are absolutely correct and there is no mistakes. Otherwise, the entire process will be delayed. Get your credit score from more than one bureau. Your credit score is extremely important, because it will decide the kind of loans you are eligible for.
3. Different kinds of loans: Unless you are paying the entire amount in cash, you need to make a monthly mortgage payment. There are different kinds of mortgage loans. If you are not able to make a large down payment and your credit history is not up to the mark, then you can go for a FHA loan. They are backed by the Government and the down payment is also low.
You can also go for the VA loan. In case of VA loans, the down payment is nil. But it is very difficult to qualify for VA loans. They are generally only limited to places where the population is very low.
Most people generally go for the conventional loans. If you are capable of making a 10 percent down payment, then this will be the best option. They are also quite easily available.
4. Get all your documents ready: When you approach a lending institution for a loan, they will obviously want to check all your documents. Hence, make sure that all your income statements, bank records and IRS documents are ready.
5. Make a proper purchase offer: The purchase offer which you need to make is a very important document. If it gets accepted, then it will be considered as a legal document. Hence it should contain all the important information like the sale price, the nature of payment and all the relevant details regarding insurance and inspection.
6. Home Insurance: When you are buying a new house, home insurance is absolutely must. It will protect you if something goes wrong. There are different kinds of insurance. Homeowners insurance is the most common. It will protect you from robbery, fire and some other incidents.