Home Buying Obstacles

What’s life without a few obstacles?  Whether you are a first time home buyer or someone who has had a mortgage before there are going to be some hurdles and obstacles that you will have to overcome.  As long as you are aware of this ahead of time and you can prepare for them, it won’t be as bad as it could be.

Now if you are a first time home buyer and think that a real estate agent is your golden ticket to get you out of these obstacles, you may want to rethink that choice.  Real estate agents can be very helpful but, they can’t wave a magic wand and make all of your problems go away.

One of the first things you will want to look at when you are thinking of buying a home is your credit score.  This number is really going to have a huge influence on your loan and mortgage payment.  The current housing market will dictate what that number should be but, keep in mind that the higher the credit score the better the interest rate on your loan and can help lower your down payment.  It can also help you qualify for a loan without mortgage insurance as well.  Try and get a copy of your current credit report and score and make sure that everything is in order before you try and buy a home.

Coming up with the money for a down payment is going to be another hurdle you will have to overcome unless you are rich of course.  Most mortgages require some sort of down payment.  The only exception is a VA loan.  VA loans are only available to veterans.  So this is another one of those obstacles that you will want to start attacking early on because no matter how good your credit is, you will have to come up with some money upfront so start saving early on.

When you are buying a home most lenders will want to only lend you a certain amount of money depending on your income.  The formula is usually your future mortgage payment plus taxes and insurance cannot be more than 33% of your gross monthly income.  Armed with that knowledge it should give you a good idea as to what you might be able to prequalify for when trying to get a new home loan.

Sometimes there can be terms that you hear that are thrown around so fast that it may make your head spin.  Try and get yourself familiar with mortgage terms like PITI and FHA and VA.  There are many other terms as well  but, the internet is a great resource to help you start to become familiar these terms so you don’t get slowed down by having to have someone define all of these terms for you or you are afraid to ask and agree to something that you may not fully understand.  This tip mostly applies to first time home buyers but, it doesn’t hurt to have a refresher if you have purchased a home before.

Now this is just a small taste of some of the obstacles that you are going to encounter on your home buying journey.  These obstacles apply whether you are a first time home buyer or not.  There are many other issues that can arise during the process and we hope to cover them in upcoming articles.

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