|
1.
Start by fixing your credit.
Since you most likely will need to
get a mortgage to buy a house, you must make sure your credit history
is as clean as possible. A few months before you start house hunting,
get copies of your credit report. Make sure the facts are correct, and
fix any problems you discover.
2.
Aim for a home you can really afford.
The rule of thumb is that you can buy
housing that runs about two-and-one-half times your annual salary. But
you'll do better to use one of many calculators available online to
get a better handle on how your income, debts, and expenses affect
what you can afford.
3. Don't worry if you can't
put down the usual 20 percent.
There are a variety of public and
private lenders who, if you qualify, offer low-interest mortgages that
require a down payment as small as 3 percent of the purchase price.
4. Get pre-approved.
Getting pre-approved will you save
yourself the grief of looking at houses you can't afford and put you
in a better position to make a serious offer when you do find the
right house. Not to be confused with pre-qualification, which is based
on a cursory review of your finances, pre-approval from a lender is
based on your actual income, debt and credit history.
5. Choose carefully between points and rate.
When picking a mortgage, you usually have the option
of paying additional points - a portion of the interest that you pay
at closing - in exchange for a lower interest rate. If you stay in
the house for a long time -- say five to seven years or more - it's
usually a better deal to take the points. The lower interest rate will
save you more in the long run.
|
