When making a down payment on a house, it is crucial not to use everything that you have in your savings. While it’s important to save enough for that big cash payment, you truly want to have more money in your savings than what you plan to spend on your down payment.
It is also key to keep in mind that what the bank says you can afford (what they offer to lend you) may not be what you can actually afford. A good rule of thumb is being able spend up to one-third of your monthly income towards all housing costs.
Being able to pre-qualify for a mortgage before you list your home is critical. You do not want to put your current home up for sale until you can get an idea of what kind of home you can afford and what your monthly payment will possibly look like.
A lot of future home owners make the mistake of either waiting too long to buy or rushing into it. You don’t want to wait for the market to drop because you might be waiting for a long time. With that being said, you don’t want to purchase the first home you like. Take your time to look at all of your options before you make the huge decision of purchasing a house and taking out a mortgage.
Your credit score can make the difference of you being able to qualify for the loan that you want. Making sure that you know your credit score and that you work on it before you starting applying for loans is important. Without a high enough credit score, you probably are not in the best financial state to be applying for a loan. Knowledge is key in finding not only the right house but also in your journey to avoid the most common mortgage mistakes.