Effective Tips for Home Buying

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Effective Tips for Home Buying

• Cory Ruppersberger

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Effective Tips for Home Buying
Purchasing a home may be the single biggest
financial transaction that you will ever make.
Thats why doing it right the first time is very
important. There are specific credit
qualifications required in a home loan
transaction. Obtaining knowledge on this subject
can help you start realizing your homeowner
dreams with a fast and easy process. Here are
some no-hassle home buying tips shared by Cory
Ruppersberger owner of Best Loan Choice, Inc., a
mortgage lending company in Columbia MD.
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Tips for Home Buying

• Strengthen your credit
• Get a Pre-approved loan
• Shop for your mortgage
• Explore debt to income ratio qualifications
• First-time buyers programs

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Strengthen Your Credit
A good FICO score will help you qualify for the
better interest rate. A FICO score of 740 or
higher will allow you to obtain the best interest
rate and help you avoid paying costly discount
points and costly out of pocket closing costs.
By lowering your interest rate, you will save
money over the life of the loan. For
preliminary credit check, its always smart to
obtain a free online credit report before you
submit your loan application to any lender.
Also, you should consider paying off credit cards
and resolving any credit disputes. This process
alone could increase your credit score by as much
as 25!
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Get A Pre-approved Loan
Before hiring a real estate agent, you should
apply to several lenders within a two week period
so that the excessive inquiries will not damage
your credit score. Understanding your monthly
payment terms will help you develop a personal on
budget based on how much of housing payment you
can afford. Without a pre-approval letter, most
buyer wont consider an offer on a property.
Furthermore, your real estate agent may be
reluctant to show you homes without confirming
your loan qualification.
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Shop For Your Mortgage
Many people find shopping for a mortgage to be a
strenuous process. Nevertheless, it is a
necessary component to determining your housing
budget. There are many different loan types and
terms based on the clients ability to pay.
Fixed rate terms can be 30, 20, or 15 years.
There is also a range of down payment options
ranging from no money down to 20 down options
(20 down allows borrowers to avoid mortgage
insurance).
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Explore Debt To Income Ratio Qualifications
Lenders mostly use 28 and 45 ratio to determine
if you qualify for a loan. Your intended housing
expenses must cover 28 of your gross income
before you pay taxes. Monthly expenditures on
your outstanding debts, when combined with your
housing expenses, must not exceed 45 of your
gross income. However, FHA will allow ratios
up to 55 but will require a higher amount of
mortgage insurance to be paid on the loan.
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First-time Buyers Programs
If you qualify as these have much lower down
payment requirements. These programs are offered
by various states and local governments. You can
ask your broker or human resource department for
specifics regarding borrowing those assets. The
United States Department of Agriculture also
offers a 0 down loan in areas that are consider
rural. The Veterans Administration also offers
a similar 0 down program to veterans of the
United States Military.
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