Being Financially Fit
With the housing market on the rise again, people are taking advantage of the opportunity to purchase homes. However, prospective homebuyers have a lot of factors to consider first. Understanding this, Vanderbilt Mortgage and Finance, Inc. is providing budgeting and buying tips to consumers in order to ensure that the decision to buy is the best next step.
Some factors to take into account before entering the purchasing and financing stage of home buying include:
- Budget—A good way to prepare for increased monthly housing expenses is to calculate what the increased amount will be and begin saving that same amount each month to prepare for the transition. Doing this and also calculating your current debt to income ratio will allow one’s lifestyle to transition in a way that can accommodate a new payment. Tools like a free online affordability calculator can help with this by predicting the amount of the new monthly payment.
- Credit Score— A homebuyer’s credit score is one factor that will determine the type of loan and the interest rate that they may qualify for. Pulling a credit report can help homebuyers make sure there are no errors that might affect financing. If there are errors on the credit report, homebuyers can work on having them corrected prior to applying with a lender for a loan.
- Debt—It is important to reduce any delinquencies appearing on a credit report. Of course, it helps to have a report without any history of late payments, but the most important thing is to not have delinquent balances prior to applying for a loan.
- Prequalification – Check with the financing company about prequalification options. Prequalification can often be done online and at home. Having an estimate from a lender about the amount that may be available for financing is a good way for the homebuyer to stay within their budget, even before shopping for a home.
View the fun and helpful “Homebuyer’s Financially Fit Road Map” infographic.