Get Your Money House in Order before House Hunting

by Tim James on February 18, 2012

There’s not a lot of great news as a result of the housing market unless you are contemplating about buying. Housing costs continue to sag, and mortgage rates are at all time lows. Sellers are uneasy, and many buyers are still on the sidelines hoping that costs and rates will decline further. If you have found your dream home it’s probably the best environment for negotiating a great deal in your favor.

But, even if you believe you need to wait, you must be prepared for the undeniable 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 ideal home. To do that, you want to get your money house straight.

Tighten your belts: A big mistake new house owners make is to wait until after their home purchase to tighten up their belts. Then, when the realisation hits that they have all these extra expenses, such as maintenance, association dues, new furnishings, they find themselves scraping for cash or getting into debt. Get on a “house” budget now to become used to the transition and start diverting excess money flow into an emergency fund or house fund to be utilized for those housing costs.

Chop your debt: When you meet your bank to get pre-approved you will need your FICO score at its highest. The easiest way to do that, except for maintaining on-time payments, is to get your debt to limit ratios down below 25%. 0% is best. Also, it’ll help you in improving your debt-income ratio which needs to be well under 38% (including a home loan payment).

Bolster your savings: While there are loans available for 10 percent down payments, even 0 percent down payments, you’ll have more options and receive better loan terms with a 20 percent down payment. If you aren’t there yet, keep moving towards it, lenders like working with borrowers who’ve more skin in the game.

Tim James asserts that Approvals.com is a Credit Card Loans and Mortgage site with great deals for saving money. Our main offerings include: Life Insurance Tips, Credit Card Comparison shopping, Credit Report Info, Current Financial News, Bad Credit, Auto Loan Approval Guides and Personal Loans.

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