Before Looking for a House What Should I do?

Before Looking for a House What Should I do?

Before you look for a house you should find out how much you can afford?

Lenders will consider you credit history, month gross (pre-tax) income and down payment.  By taking into account the current interest rate, a lender can give you an estimate of the maximum mortgaged amount you can afford. By adding your maximum mortgaged amount to the funds you plan to use for your down payment you will know your price range.

How much can you be approved for?

Based on your financial records, the lender will use guidelines to make sure your housing and dept. payments will not exceed your income.

What is Housing Expense Ratio?

This shows how much of your gross monthly income will go toward the mortgaged loan payment. This payment usually includes principal, interest, real estate taxes, and homeowners insurance; and it should not exceed 28% of your gross monthly income.

What is a Dept to Income Ratio?

This will show how much of your gross income will go toward monthly dept payments including mortgage loan payment, credit cards, car loans, student loans, consumer loans and other obligations such as child support. Usually your monthly dept obligation should not exceed 36% of your gross income.
Once this figure had been determined, it is up to you to decide if the amounts will suite your needs.

Obtain a Pre-Approval
Before looking for your new home it is important that you have available a pre-approval letter. This is an way to obtain early assurance that you meet the necessary credit requirements for a specific loan amount . With the pre-approval letter you will know how much home you can afford. Without fulfilling the requirement a serious Real Estate Professional will not take you out to tour properties, and you will not present yourself as a serious buyer.

For information about on How Can I get financing to buy a Home click here

Understanding credit:

Before looking for a house you should get pre-qualified for a mortgage, the lender will obtain a credit report from the three major credit agencies.  This information comes to the reporting agencies from retailers, public records, and bank records. The scoring system analyzes patterns over time, with more recent payment and debit habits holding the most weight. The main components of the credit scoring system are:

*Payment history
*New credit
*Amount of money currently owed
*Types of credit in use 

Now you know what to do before you look for a house, your next step is actively looking for a dream home, you can use this incredible tool do view all properties listed in the MLS just click

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