Buying a new home is a dream come true. For most of us we want to know the basics before buying a home. Purchasing a new home happens to be dream of lifetime and it is investment of lifetime. Though it may sound familiar here are my simple tips on prepare yourself before purchasing your next new home :)
1) Credit Score - You get loan at better rates if you have better credit score. Follow simple steps to have better credit score
1.1) Pay credit card bills on time
1.2) Pay all the bills on time - Some expenses like utilities demand payment from bank account. As such make sure you pay bills on time. Once a bill hits collection this affects your credit score
1.3) Make sure you maintain good credit score atleast 1 year before home purchase
1.4) Simple trick - Pay $1 more than your minimum payment due. This creates impression that you repay more than minimum payment amount and it improves your credit score
1.5) Check your credit score periodically in free credit score websites
2) Open Bank Account - We recommend to look for FDIC insured trusted bank that pays better interest. Have this fund in good standing for atleast 6 months so that you can submit your statement without any delay during mortgage loan processing. In case of joint contract if you maintain joint bank account it becomes really easy to process and approve loan
3) Check for best mortgage rates and lock-in your rates well in advance - Last few months have shown drastic fluctuation in interest rates. If you find a better interest rate,try to lock-in the best interest rate well in advance
4) Start checking out home prices today - For success the main hindrance is laziness and procrastination. This equally applies to home purchase as well. As a debut home buyer, look for prices of homes in your locality starting today. This gives you feeling of what the prices are like in your locality
4.1) Most mortgage providers demand 20 to 25% of home purchase price as down payment to avoid mortgage insurance and get best rates. Mortgage insurance is a totally separate topic and lets discuss in detail later
5) Plan your taxation - It would be interesting to note that be it your own home or rental home, all your mortgage interest, property insurance , mortgage insurance can be deducted in federal taxes. Some states do offer property tax deduction. Even if you own rental property the depreciation calculation helps you bring down the tax liability. Talk to your tax consultant to see how much can end up saving
6) Set-up automatic deposit into Bank account - This would be an indirect disciplinary attitude that automatically deposits money in your account and it grows automatically yielding more interest
1) Credit Score - You get loan at better rates if you have better credit score. Follow simple steps to have better credit score
1.1) Pay credit card bills on time
1.2) Pay all the bills on time - Some expenses like utilities demand payment from bank account. As such make sure you pay bills on time. Once a bill hits collection this affects your credit score
1.3) Make sure you maintain good credit score atleast 1 year before home purchase
1.4) Simple trick - Pay $1 more than your minimum payment due. This creates impression that you repay more than minimum payment amount and it improves your credit score
1.5) Check your credit score periodically in free credit score websites
2) Open Bank Account - We recommend to look for FDIC insured trusted bank that pays better interest. Have this fund in good standing for atleast 6 months so that you can submit your statement without any delay during mortgage loan processing. In case of joint contract if you maintain joint bank account it becomes really easy to process and approve loan
3) Check for best mortgage rates and lock-in your rates well in advance - Last few months have shown drastic fluctuation in interest rates. If you find a better interest rate,try to lock-in the best interest rate well in advance
4) Start checking out home prices today - For success the main hindrance is laziness and procrastination. This equally applies to home purchase as well. As a debut home buyer, look for prices of homes in your locality starting today. This gives you feeling of what the prices are like in your locality
4.1) Most mortgage providers demand 20 to 25% of home purchase price as down payment to avoid mortgage insurance and get best rates. Mortgage insurance is a totally separate topic and lets discuss in detail later
5) Plan your taxation - It would be interesting to note that be it your own home or rental home, all your mortgage interest, property insurance , mortgage insurance can be deducted in federal taxes. Some states do offer property tax deduction. Even if you own rental property the depreciation calculation helps you bring down the tax liability. Talk to your tax consultant to see how much can end up saving
6) Set-up automatic deposit into Bank account - This would be an indirect disciplinary attitude that automatically deposits money in your account and it grows automatically yielding more interest
