If you are on the lookout for your first home then you are likely full of a lot of different emotions. Many people are excited about the idea of buying a home, but they are also nervous. They don’t know what to expect or how to prepare. The best way to ensure that you are moving forward in the best way is to work with an experienced real estate professional who can walk you through the process.
Those who are considering buying a new home should begin by contacting Berkshire Hathaway HomeServices at (310) 373-0021. You can also read on to get some of the best tips to ensure you have the best experience possible.
Find out what your credit rating is
Today it’s fairly easy to get your credit report and it is important to do so before shopping for a mortgage. If you want the best possible loan rates, then your credit score should be at least 740. If it’s significantly lower than that, then it may be a good idea to wait until you have improved your credit to buy a home.
Get rid of debt
If you have significant debt and have not yet bought a home, then you may want to wait until you have paid it down (or most of it). You will find it harder to pay down this debt after buying a home and it can affect the terms of your mortgage. That said, in some markets it is much more affordable to own a home than to rent, so it may make sense to take on the debt of a mortgage even if you have existing debt.
Know the top three factors in securing loan terms
As the lender considers whether to approve a loan and how much that loan should be for, they are going to consider three main factors:
- Credit rating
- Income to debt ratio
- Income
Once you know what the banks are looking for, you will have a better chance of getting yourself into position for the best possible mortgage.
Have a savings account for home emergencies
If you currently rent or live with your parents, then you do not have to worry about home repairs. You do not have to worry about what would happen if your boiler stopped working. When you buy a home, you do have to worry about these issues. As a result, make sure that you have a home emergency savings account.
If you are buying an older home then this emergency savings account should be larger. If you are buying a new construction property then it should come with a home warranty that would cover most everything that is not covered by your homeowner’s insurance. When you work with Berkshire Hathaway HomeServices we can help you assess the financial risk of any property you are considering. Contact us today at (310) 373-0021 to get started.