Are you currently checking Austin real estate for a house to buy? Buying a house is an important investment, so you want to make sure the conditions are favorable before you put your money down. Before you get into the process, however, you need to do a few things to minimize the chances of having to jettison your purchase plan when you’re halfway through the process. Bankrate, a publisher in the banking industry, recommends a few things to keep in mind before you buy a house.
First, you need to improve your credit score. Unless you have lots of cash in hand, you’ll need to apply for mortgage to be able to buy the house you want. In the simplest sense, take note that a higher credit score will get you better loan deals. Above 660 is a good minimal target, and above 720 will get you better deals. If you want the best rates around, get your score above 750. There are borrowers who get qualified at a score below 600, but they should expect the conditions of higher down payment and higher interest rates for their loan.
Next, determine what you can afford. The important things to consider here is your monthly income and what you can set aside out of your net income to pay for your monthly mortgage. As a baseline, you’ll want to keep your mortgage payments under 28 percent of your monthly income, and no higher.
Next, set up your budget and your savings for the down payment and closing costs. Do your research on these costs, or you can ask Austin, Texas real estate companies like Top Austin Houses for estimates on the type of property you want to buy.
Getting pre-approved is half the battle won. With a pre-approved loan, agents and sellers will take you more seriously, and you can focus on the kind of properties that your loan will be able to cover. CNN Money highlights that getting pre-approved will keep you from wasting your time looking at homes you can’t afford; the piece of paper also puts you in a better position to make an offer immediately once you find the house you want.
Before making a bid for the house, though, do your second round of research. Check sales of nearby similar homes in the past three months. For example, if such homes sold recently at five percent lower than the asking price, you can make a bid eight to ten percent below the seller’s asking price.
There you have it—get yourself armed and ready with the right preparations to position yourself as a serious buyer of the house you have in mind.
(6 must-do’s before buying a home, Bankrate, undated)
(Tips for buying a house, CNN Money, undated)