In my, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I have witnessed, many individuals, who, hope to purchase, a home, of their own, suffer, less – than, their most – desired results, especially, in terms of making the process, as stress – free, as wanted! There are many types of economic plans and planning, which would benefit, buyers, if they proceeded, to use them, from the beginning! With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 6 of these, and why, doing so, would make a potential buyer’s life, easier, more – focused, and far – less stressful!
1. Credit history and Rating: Before, beginning, your search, thoroughly, examine, your Credit History, and check, for, any items, which might be inaccurate, and/ or, incomplete (not updated, etc)! Review, and understand, anything/ everything, which, might be considered, negative, when lenders review your credit! What is your Credit Rating, with each of the three major agencies? You should seek, to enhance and improve, these items, which you can, do, by yourself, and/ or, hire someone, to address for you, if you don’t feel comfortable, doing so! Your credit, might impact, whether you qualify, for a mortgage, what rates, you will pay, and, thus, what, your, buying – options, might be!
2. Overall debt ratio: Find out, what your, overall, debt ratio, is! Lenders, generally, seek a specific ratio (often, in the mid – thirties). It is wise, before you start, to discuss, your personal status, with a trusted, mortgage banker/ broker, so you know!
3, Housing debt ratio: Lenders also use, specific formulas, to determine, what they consider, necessary ratios, in terms of, the ration, between one’s housing expenses, and income. Know, what you qualify for, so you might search, effectively, and efficiently!
4. Get pre – approved, for the maximum, you qualify for: There is a significant difference, between, being, pre – qualified, and pre – approved! The former, means, based on the general information, you provide, you might qualify, for a certain amount. On the other hand, a pre – approval, is based, on the same (or similar) information, documents, etc, which will, eventually, be used, and thus, the process, becomes far easier, and, thus, less – stressful! The reason for knowing, what the maximum, you are approved, for, is, to shop, accordingly, and avoid future disappointment, etc!
5. Down – payment: Although, lower amounts, are, often, acceptable, a conventional mortgage, usually, demands a 20% down – payment! How will you pay, this? Will it be comfortable, for you?
6. Reserves/ comfort zone: Homeownership, usually, comes with, certain expenses, some – predicted, and some, unforeseen! Some of these reserves, include: repairs; renovations; upgrades; appliances; minor systems; major systems; personal economic down – periods! Expand the limits of your personal comfort zone, by being, as ready, and prepared, as possible!
The better prepared, one is, the easier, and less stressful, the home buying, process, will, usually, be! Will you proceed, with the discipline, commitment, and attitude/ attention, needed?