Living in own home is everyone’s dream. If you’re planning to make a home purchase, you should check your financial resources and if they’re enough to buy a new house. And if not, start figuring out what alternate options are suitable for you. We’ve given a few advices on how to afford a new home.
1. Liquid Assets
Mortgage loan doesn’t cover everything. You need to still use your money to pay a few costs. You have to make a down payment for the purchase to confirm the deal. Also, you need to pay for the closing costs that go to your lender and other third parties in exchange for the loan. So have some money readily available to buy a home.
2. Mortgage Loan
If you’re borrowing money for the purchase of a new home, the lenders will go through your employment history and how much you earn to ensure you have stable income to repay the loan. You can submit proper documents that declare your steady employment status. Submit your payrolls for the said period or your tax returns if you’re self-employed. Your credit score also plays a big role in getting loans. It proves to your lender how reliable you are in repaying the loan. Increase your score if it’s low to get a mortgage. You require a credit score of a minimum of 620 to qualify for the majority of loans, but a score of 750 or above will get you the best terms.
3. Seller Concessions
Buying a home is a lifetime investment. Ask your lenders to do a home inspection to find any red flags. Review the results and look carefully for any issues. As you’ll be liable for any repair that found after you bought, notify your seller soon to repair them before closing. If they’re not willing, you can request a discount in purchase price or ask them to cover some of your closing costs. Such seller concessions can aid you in saving a little more.
A golden rule for when to buy a home is after you save 20% of the home value. Then with the help of mortgages, you can buy a home. Also, exercise your rights completely to get all the benefits a home buyer deserves.
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