When house prices are on the rise and interest rates are also on the way up, affording a home can seem like a faraway dream. You can save for a down payment, of course, but that can take longer than you want to purchase a house.
Fortunately, there are other steps to make your dream of home ownership come true and protect it when you find the perfect one.
1. Look for Career-Related Special Mortgages
Some lenders offer special mortgages to people in specific careers. These loans often require no down payment and come with competitive interest rates. If you're a public servant, such as a firefighter, government employee, teacher or healthcare worker, you may find a particular mortgage available.
2. Budget for an Appraisal
The home buyer is usually responsible for paying for home appraisals. However, depending on the market and seller, you may be able to negotiate the cost. You can expect to pay $300-$400 for an appraisal, but prices can vary depending on the house size and the state you're buying in.
3. Shop for Down Payment Assistance
Many state and local governments offer down payment assistance programs for buyers. Most assistance is for first-time buyers, but it doesn't hurt to check.
You can potentially receive down payment assistance in one of these forms:
- Repayable loan: You pay it back monthly in conjunction with your mortgage.
- Forgivable loan: If you remain in your home and don't sell or refinance it, your loan is forgiven over time.
- Deferred loan: You repay it when you sell, refinance, move or finish paying your mortgage.
- Outright grant: This assistance requires no repayment.
4. Apply a Second Income to Your Mortgage
Do you have a side hustle? Tell your lender. You may be able to afford a bigger mortgage. You must document it properly for tax purposes, however. Also, most lenders require you to have a two-year history of that income type.
5. Boost Your Credit Score
A high credit score can earn you a lower interest rate, increasing the amount you can afford to borrow. Get your credit reports and inspect them for errors — you may be surprised to find one. If you do, your lender may use rapid rescoring to help you boost your credit score in days instead of months.
Other steps to increase your credit score include making payments on time, paying down your credit card balances, and using a secured credit card.
6. Compare Mortgage Rates
You don't have to settle for the first mortgage rate a lender offers you. Call several lenders and do some comparison shopping. You can even initiate competition if one lender offers you a lower rate than another.
A small amount here and there might not seem like much, but it can add up to thousands of dollars throughout your mortgage.
7. Secure the Locks
Once you have found your home, it's critical to take steps to protect your new purchase. One of the first things to do is to change the locks. You don't know who has keys to your home, even if the previous owners claim they gave you all the keys. Don't forget about the garage or shed doors.
8. Install Cameras
Fortunately, security cameras are getting less expensive all the time. You can install ones that connect to your smartphone, letting you see vantage points around your property.
9. Protect Against Spoofing
Criminals don't always try to break in the front door; sometimes, they get inside another way. Caller ID spoofing happens when a fraudulent caller falsifies the information on your caller ID to look like a neighbor or local agency. Once you answer, they try to get your personal information or money. You can subscribe to a service designed to block spoofing calls.
Affording and protecting your new home takes research, but it's worth the trouble. You can enjoy your home with the peace of mind of doing everything possible to save money and keep it safe.
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