Buying Real Estate? Here’s How You Can Prepare for It Financially
There’s no bigger purchase you’ll make in your life than a home. If you’re looking to finally become a homeowner, you need to get your finances in order first. To make sure you can afford a home and get a fair deal on your mortgage, be sure to take note of these valuable tips.
Determine How Much You Can Afford
Since you’ll be paying for a home over the next few decades, be sure to settle for a price you’ll be comfortable shelling out monthly payments for. In general, experts say never to pay more than 28% of your gross monthly income on home expenses. This number should factor in not just your mortgage but also your home insurance, property taxes, and association dues if any.
Get Your Credit Rating in Order
Unless you’re born with a silver spoon, you probably can’t afford to buy your home outright—like most people, you’ll probably need to take out a mortgage for the purchase. However, banks and other lenders want to see a good credit rating as a proof you’ll be able to pay them back. If your credit rating isn’t high enough, they might still give you a loan but at a higher interest rate. A quick way to boost your credit rating is to aggressively pay down your credit card debt before applying for a mortgage. Read more from this article: http://bit.ly/2qiyaB0