Arizona Tribune - 5 Things to Do Before Buying a Home

1. Research the market

Understanding the housing market is essential to getting the home of your dreams. Not all homes are priced the same, which can sometimes work for or against you.

About 3 to 6 months before you would like to move, go online and start looking at properties in areas you would consider living. Click on the listings and become familiar with details such as:

• Square footage

• Lot size

• Upgrades

• Property taxes

By doing this, you'll start to gain a sense of the current market price for housing. This will also help you negotiate a fair price and not pay more than you should.

2. Review your budget

While it's important to buy a house that you can fall in love with, it's even more important to buy one that you can afford. Don't fall into the trap of mistakenly purchasing the biggest home you can get only to have your finances suffer later.

You'll want to review your budget and understand how much you can realistically afford each month. One rule of thumb is that your mortgage payment should be no more than 30% of your gross monthly income. Going beyond this could cause you to sacrifice other financial priorities.

3. Reduce your debts

If you need to carve out some more room in your budget, a good way to do that is to reduce your debts. This can be accomplished with a debt consolidation loan.

A debt consolidation loan is essentially a lump sum loan that can be used to pay off your current debts. This may help to eliminate other variable and high-interest debt and replace it with a single monthly payment that is more consistent and manageable.

4. Check your credit score

Your credit score can be the thing that makes or breaks whether you can buy a home. While most mortgage applicants need a FICO Score of at least 620 to qualify, many lenders will want to see a higher credit score to ensure the best interest rates available.

Before approaching the lender, it would be a good idea to check your score so you know where you stand. You can usually do this for free using a number of online services, like AnnualCreditReport.com. Many major credit cards also have a feature that allows you to view your credit score.

5. Know what kind of loan you want

Not all mortgage loans are the same. Some carry a fixed interest rate lasting for 15 or 30 years. Others offer an adjustable-rate mortgage, or ARM, that will start with a low interest rate but change to the market rate after a few years.

Home seekers should do their homework before applying to understand the differences between these types of loans. Since this will likely be your largest payment for the next few decades, choosing one you're comfortable having is important.

The bottom line

Before getting wrapped up in the excitement of home ownership, research and become familiar with the housing market. Review your budget to see what you can afford and consider consolidating your debt to free up some of your cash flow. Don't forget to check your credit score before approaching a lender and know which type of mortgage you'd like to apply for.

Contact Information:

Name: Sonakshi Murze
Email: [email protected]
Job Title: Manager

SOURCE: OneMain Financial

View the original press release on ACCESS Newswire

J.Gomez--AT