Although owning a home of one’s own is often considered a significant component of the so-called American Dream, wouldn’t it make sense to plan effectively to ensure this doesn’t become a nightmare instead? After over fifteen years as a Real Estate Licensed Salesperson in the State of New York, I have created what I often refer to, as the RICH IDEAS, for proceeding wisely in terms of buying a house. With that in mind, this article will attempt to examine, review, and discuss a 5 – step plan for properly, effectively, and wisely being prepared for this process and proceeding accordingly.
1. Put together/ accumulate sufficient funds for various requirements and necessities: It’s wise to proceed as well – prepared, as possible, from the beginning. Well – before you start searching for a house, begin saving money systematically. Remember, you will need not only funds for the down-payment (often, but not always, 20%), but also funds for other Closing Costs, including, but not limited to, pre-paid real estate taxes, utilities, and other so-called escrow items. In addition, most lending institutions require a demonstration and proof of funds of mortgage payments, equal to several months.
2. Obtain a copy of your Credit Report (if husband and wife, get both): You are entitled, once per year, to request a free copy of your Credit Report from one of the significant credit organizations/ companies. Review this document carefully, and correct any errors. If your rating is not as high as a lending institution may seek, begin to take steps, to enhance and improve it sooner rather than later!
3. Pay – down other debt: Lending institutions use formulas to determine one’s qualification to receive funds. These are generally focused on one’s percentage of debt to income. Therefore, pay down your other debt before beginning the process!
4. Don’t add any other debt: Avoid acquiring any more debt, regardless of how convenient and appealing it may seem. Don’t fall into the trap of accepting new store charge accounts because doing so may compromise your credit worthiness when you seek a mortgage!
5. Shop for homes within your means: Avoid the trap of becoming house-rich and seeking to purchase a home beyond your comfortable means! Know how much you can afford, comfortably and securely, so choose wisely and remain comforted!
Since, for most of us, the value of our house is our single – biggest asset, doesn’t it make sense to proceed carefully and wisely? Will you be up to this task?
Leave a Reply