Home Buying Advice You Shouldn’t Ignore
You’ve probably heard a lot of home buying advice. But is it really that helpful? In a crazy real estate market, home buying advice is pointless at best, and downright counter-productive. What’s more, it runs counter to common sense. Here’s why:
Suze Orman’s approach to home-buying
Whether you’re buying your first home, remodeling it, or looking to move to a bigger neighborhood, there’s no better time than the present to learn from Suze Orman’s proven strategies. Her books have become household names and her approach to finance has become a popular way to manage finances. She is also a motivational speaker who has been recognized by dozens of publications.
While some people have the ability to work a room, others thrive on attention. Suze Orman is a mix of expert and entertainer. She doesn’t just give advice and educate, she’s a full-fledged entertainer. Her approach to home-buying combines entertaining and informing. She’s more than a guru: She is a well-known author and speaker who has taught millions of people how to become financially independent.
Jamohl De Wald’s advice for first-time buyers
The first time you buy a house, you are likely driven by emotions – security, freedom, and your vision for the ideal lifestyle. Unfortunately, many first-time home buyers overspend on their homes, end up wasting their money, and find major issues with their new home. Rather than overspending, try to stick to your budget when buying a house, and keep searching.
The first thing to keep in mind is the cost of home ownership. Although the monthly house payment may be comparable to your rent, it can quickly add up. It is best to buy a house when you are debt-free and have an emergency fund of at least three to six months’ worth of expenses. If possible, rent a small apartment or home for a few years to get a better idea of the real estate market.
Pre-qualifying for a mortgage
Getting pre-qualified for a mortgage when buying a home can save you time and frustration. Rather than relying on self-reported information, lenders will conduct additional verifications to ensure your eligibility. Additionally, pre-qualification gives you peace of mind and reassurance as you begin your search for a home. Dan Green, a former mortgage loan officer, offers his advice to first-time home buyers.
One of the most common formulas used for mortgage pre-qualification is the debt-to-income ratio (DTI). This ratio is calculated using your monthly income and home-related expenses. The back-end DTI, on the other hand, is based on your total debts. Conventional mortgage lenders prefer a DTI ratio of 36% or lower for home-buying purposes, but there are government-backed loan programs that allow higher DTI ratios.
Getting financing
When it comes to financing your new home purchase, there are several important factors you should consider. One of the biggest is the down payment, which is a large initial expense. While many first-time buyers think they need at least 20% down, many lenders are willing to approve loans with as little as 3% down. To reduce the amount of your down payment, consider applying for down payment assistance. A second mortgage, for example, can reduce the amount you need to put down.
If your income and credit score are below the required limits, there may be grants available through your local community bank or credit union. You may also be eligible for government-backed loans, such as those offered by the U.S. Department of Veterans Affairs and the Federal Housing Administration. You can also search for state government-backed programs that offer down payment assistance and low interest rates. These government-backed programs can be invaluable to those with limited savings.
