A realistic budget, pre-approval for a home loan and the best possible credit scores are a couple things that will help you buy affordable housing.
Homeownership comes with a variety of costs. If you want to buy affordable housing, you need to consider much more than the purchase price. Real estate listings simply tell you the cost of purchasing a home. To truly buy affordable housing, you want to find a home that you can afford to maintain, insure and improve over time.
To buy affordable housing, it is imperative to take proper steps in ensuring that the housing you find is right for you or your family. These initial six steps help you plan and budget for the home you buy.
1. Identify your housing needs. If you plan to live in your home for the next five to 10 years, what size home do you need? You don’t want to outgrow your home in two years.
2. Fix credit and finance issues. Something as simple as a late payment can lower your credit scores. Lower credit scores can cause you to get a higher interest rate on your home loan. Review your credit report before you seek pre-approval from lenders and dispute issues like late payments, old issues that did not “fall off” your report after seven years or mistakes on the report.To learn more about improving your credit and buying homes with bad credit, go to this article.
3. Get pre-approved for a specific mortgage amount. You need to know what a lender will allow you to spend before you attempt to buy affordable housing. A home that is affordable for another person may not be for you. This article explains what lenders look for during the approval process. It also has a calculator so you can determine your debt-to-income ratio, which mortgage lenders factor into your loan amount.
4. Create a realistic budget. Once you know what your lender will allow you to spend, you also know what your estimated mortgage payment will be. Now, add the cost of insurance, property taxes, maintenance, pest control, and any other bills related to homeownership to the bills you already have to pay. If you are renting and have never owned a home, you may be required to pay a deposit for basic services like water.
5. Learn about programs that help you buy affordable housing. State and federal programs such as Federal Housing Administration (FHA) loans can lower your interest rate, pay your down payment or closing costs or help you buy a home that needs repairs. These home loan programs can make homeownership even more affordable.
6. Get the help of a professional real estate agent. An agent will help you determine which homes are affordable so you actually buy affordable housing. He or she will notice problems with homes that you might overlook and warn you about the risks of buying foreclosed properties. An agent will also know a licensed home inspector who can ensure the home you want to buy does not need repairs.
These steps will you buy affordable housing for your budget and your life, since you will make the monthly payment. Once you have your credit and financing ready, you can find a real estate agent in your area at Reply!