Save for the Home Buying Expenses
Buying - Get your finances in order part 1 of 2
When buying a home, there's a lot more money you'll need upfront besides a down payment. With tougher lending rules, more and more lenders want buyers to put up higher down payments than in the past. There are some that require as little as 5%, but if you want to avoid paying private mortgage insurance, that will jump your down payments to 20% of the sales price.
Other costs associated with buying a home are option money, earnest money, and inspection money. Most buyers request an option period to inspect the property. This option period comes at a price and is referred to many times as the option fee. Many sellers expect an earnest money deposit to be made by the buyer to the title company. The cost of a home inspection can vary and the price can go higher if you get inspections for termites or pests and foundation inspections.
Reduce Your Debt
Lending rules are getting a lot tougher these days. IT's important to decrease the amount of debt you have so you can increase your credit score. Pay off as much debt as possible. Credit cards and lines of credit are big problems for some people.
Here's a scenario for you... Sam makes $75,000 per year, has 3 credit cards that each have a $25,000 limit. He owes $2,000 on each of those cards. Chris makes $150,000 per year and also has 3 credit cards that each have a $25,000 limit. Chris owes $24,000 on each card. With all else being equal, who do you think has a better chance of getting approved for the loan? I'll give you the answer in next week's blog. ;)
Comments(0)