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Get Your Financial House in Order before
House Hunting |
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Posted: 13th January 2012 |
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There’s not much good news coming out of the housing
market unless you’re thinking of buying. Housing prices
continue to sag, and
mortgage rates are at all time
lows. Sellers are anxious, and many buyers
are still on the sidelines hoping that prices and rates
will drop further. If you’ve found your dream home it’s
probably the best environment for negotiating a deal in
your favor.
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But, even if you think you want to wait, you
need to be prepared for the fact that
lenders have stepped up their requirements
and the road to an on time escrow close
could get a little bumpy.
It’s strongly recommended that you do what
it is necessary to get pre-approved before
you lock your sights on your new dream home.
To do that, you need to get your financial
house in order. |
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Tighten your belts: A big mistake new homeowners
make is to wait until after their home purchase to
tighten their belts. Then, when the realization hits
that they have all of these extra expenses, such as
maintenance, association dues, new furnishings, they
find themselves scraping for cash or going into debt.
Get on a “house” budget now to get used to the
transition and start diverting excess cash flow into an
emergency fund or
house fund to be used
for those housing expenses.
Slash your debt: When you meet your lender to get
pre-approved you will need your credit score at its
highest. The best way to do that, aside from maintaining
on-time payments, is to get your debt to limit ratios
down below 25%. O% is better. Also, it will help you
improve your debt-income ratio which needs to be well
below 38% (including a mortgage payment).
Beef up your savings: While there are loans
available for 10 percent down payments, even 0 percent
down payments, you’ll have more option and receive
better loan terms with a 20 percent down payment. If
you’re not there yet, keep working towards it, lenders
prefer working with borrowers who have more skin in the
game.
Approvals.com is a
Credit Card, Loans and
Mortgage website with great deals for saving money. Our
main offerings include:
Credit Card Comparison
shopping, Credit Score Information, Current Financial
News, Bad Credit & Auto Loan Approval Guides and
Personal Loans.
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