Almost seven million homes are sold every year. People are buying and selling constantly and almost anyone who dreams of homeownership can achieve it.
But not everyone who buys a home is a smart homeowner. In fact, many people make extremely unwise decisions when buying a house, as their emotions get the best of them. And they end up paying for it, literally, for years.
In 2022, the real estate market is still booming. Prices are rising, and competition is fierce around the country. This leads people to make rash decisions, overpay, and lock themselves into bad situations.
If you want to avoid this, so you can protect your budget and not be a slave to your mortgage payment each month, you need to take your time when buying a house.
What are the things you need to do before you even buy, that can set you up for success or failure? Read on below for a few helpful tips.
Raise Your Credit Score
One of the most important things you can do prior to getting a mortgage is to raise your credit score. It’s one of the biggest factors that affect your mortgage approval, and, more importantly, your interest rate.
The higher your score, the less interest you’ll pay over the life of your loan. Pay down debt, correct errors on your report, and avoid any further dings on your report before buying a house.
Maintain Steady Work History
It’s becoming possible for those without traditional jobs to get a mortgage. But that doesn’t mean it’s easy. Those who are self-employed, own a business, or have other sources of income will struggle to find a lender.
They will also pay higher interest rates, higher closing costs, and spend much longer working towards approval. The easier path? Maintain a stable, W2 job for at least two years before applying for a mortgage.
Consider All Purchasing Methods
There are many ways to buy a house today. You don’t have to limit yourself to a traditional mortgage, with 20% if you feel that is out of reach.
If you’re a veteran, you can get a VA loan. If you’re a first-time buyer, whose financial situation isn’t the best, an FHA loan might be your best option. You can also check out rent to own houses which is a solid option for those who dream of buying but don’t think they can for a few years.
Contact A Good Agent
A good real estate agent will make your dreams come true, by working hard for you. A bad one will make you feel like an inconvenience. Take your time to find the right agent, especially in this market.
And once you make an offer, make sure to get recommendations on the best home inspector, to ensure you aren’t getting ripped off by the sellers.
Look For A Deal
If you want to be a smart homeowner then don’t buy the most expensive house. Don’t buy based on curb appeal, or how perfect everything is. You’ll end up paying too much, and have limited potential for equity growth.
Instead, buy for potential. If you don’t mind doing a few projects yourself, you can buy an outdated house with a low home appraisal value, refresh it over time, and make some serious equity.
Be A Smart Homeowner
Becoming a smart homeowner isn’t easy. Making an emotional, costly decision when buying a home is easy.
Instead, take your time when buying a house, and focus on improving your financial situation, raising your credit score, and boosting your savings if you want to make it out on top.
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