Tips for your clients on buying a home

minusminustext size

posted 7/6/2012 in Realtor News

Review your finances.

A detailed analysis of your financial situation is central to the decision to buy. Calculate all of your monthly expenses, in addition to your potential mortgage payment, homeowner's insurance and taxes. Factor in other obligations such as car payments, credit card debt and living expenses. Budget for home maintenance costs as well. Aim to keep the mortgage payment and all other obligations below 40 percent of your monthly income, and stay within your budget when considering homes.

Check your credit score.

Your credit history is an important factor when applying for a loan. The score reflects how well you manage your debt and is calculated using data from your credit report. A lower credit score will result in a higher interest rate on your loan. If your score is too low, you may not be approved for a loan at that time. There are a number of steps you can take to improve your credit score, including paying your bills on time, only opening lines of credit you need and keeping your credit card balances below half of your available credit. To learn more and get information about improving your credit score, visit Northwest Bank's Credit Guard Coach.

Organize your finances.

Getting a loan requires a few different documents including, but not limited to, pay stubs, tax returns and financial statements that are less than 60 days old. Provide copies of additional monthly payments, such as car loans, credit cards and student loans.

Factor in closing costs.

Once you have found a home within your budget and agreed on a purchase price, there will be costs associated with closing the sale. These costs can vary and will depend on the purchase price.