The housing market, while still recovering as of this writing, is experiencing good performances all around. It is at this time that buying a new home is actually better than spending your money on rent every month. If you have enough savings to cover the down payment on a new house, wouldn’t you rather be paying monthly to own the house you’re living in instead of just renting it?
Your best first step is to find out how much you can afford to pay for a house. To do this, find out how your credit score is faring. Once every twelve months, you can ask the three credit reporting agencies — Equifax, TransUnion, and Experian — to give you a copy of your credit report. This is also a good way to find out if your credit report is up to date, and you may file a complaint with the credit reporting agencies if you want corrections on your score.
Once this is all settled, get prequalified for a housing loan. When you get prequalified, you can freely shop for the house you want within the limits of how much you can borrow for your mortgage. Doing this the other way around is problematic, because you might fall in love with a house you cannot get an approval for. Aside from wasting your time and effort, you’ll also break your heart. So get prequalified first, then start shopping.
Repairs on a House You Want to Buy
You might find a house you want, and the price tag is within your range, but the house needs some repairs. You know that this will cost you more money right after you buy it. Primary Residential Mortgage, Inc. says there is a way to include the repair costs with your mortgage: an FHA 203k loan. This is a kind of loan insured by the Federal Housing Administration. You can get a regular version of the loan ($5,000 minimum requirement for use on repairs), or a streamlined version (don’t need structural repairs, with a cap of $35,000 for repairs).
If you can afford to rent a pricey apartment, you may be able to afford a house. Home ownership is part of the American Dream, and this is the time to turn yours into reality.