The Incredbile Guide To Financing Your New Home

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Once you have decided to buy a new home, the next stage is to decide how to finance your house. Many buyers find the thought of sorting out their property finances scary. It can be a genuine worry when you’re not sure where to start with finances and mortgages.

Knowing the facts before you begin will give you an advantage over the crowd. There is no need to sit around feeling confused and upset at the prospect of sorting out the paperwork and money issues. Instead, read this guide, which will tell you how to plan out your finances and the best places to go for help.

Make Sure You Have Good Credit History

Remember how everybody kept telling you that you should build up your credit history? Well, now it is the time that credit history counts. Your credit rating shows the seller how trustworthy you are.

If you have bad credit history then, you may not be able to get a mortgage or buy your new home. You can get bad credit history by not making proper repayments. For example, if you have taken out a credit card and were not keeping up to date with your repayments then this will show up in your credit report. The same applies if you are always late when paying utility bills in your name or slow at paying rent. These details will decide whether you have good credit history or bad credit history.

It is also important to remember that having no credit history is as bad as having awful credit history. The seller does not know whether they can trust someone who has never built up a successful credit score. If your name has never been on bills and you have never taken out a credit card then, you might find it hard to build up a credit score. Look into your credit history and take relevant steps to improve it before you buy a new home.

Set Your Property Budget

If you are buying a home alone, then you only need to take into account your income and promotion prospects when setting a budget. Couples should look into both of their incomes and set a budget according to that. The general rule is that your budget should be five times your annual income. For example, if you make $20,000 a year then you can start looking at houses in the $100,000 region. If, as a couple, you have a combined income of $40,000 then you should look at properties in the region of $200,000. Sit down alone, or with your partner, and doing the maths of your mortgage before you look for a home.

Consider A Loan Or Extra Finance

Unless you are lucky, you will not have the money up front to pay for your new home. That is where a mortgage broker comes into the equation. The mortgage company will put up the money to your estate agent or seller, and you will then pay the mortgage company. You should make sure that you understand the mortgage terms and conditions before you accept them. Look over the terms alone or with your partner before you choose the right mortgage.

Prove Your Income

When you buy your home, you will need to prove your income. Take the time to sort out your previous bank statements and wage slips. You will need to show these to the estate agent as proof that you can afford to buy a house. Make sure that your finances are all accounted for, you will need to be completely honest. If you have any debt that you have not declared, you should tell the estate agent about it. You can’t lie about your finances, as any secrets you have will show up in your credit check.

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