September 12, 2023
Do you want to buy a house this year? There is still time in 2023 to take advantage of the lower FHA loan limits set at the beginning of the new year. There are also things you should do to prepare for the loan, and it’s a very good idea to give yourself extra time to get it all done.
It’s best to come to the application process with the following steps already accomplished.
Check Your Credit Report
Start reviewing your FICO scores and details to make sure there are no errors, identity theft, outdated information, etc. You are legally entitled to a free credit report. Contact Experian, Equifax, and TransUnion to learn more about contesting errors or other issues on your credit reports.
Use A Mortgage Calculator
An online mortgage calculator will give you a better idea of how much home loan you can afford.
The online calculator will ask you for the price of the house, the interest rate, property taxes, and other variables. You won’t just be asked for the term of the loan and the amount of it
Check Your Spending
Your lender wants to see your debts compared to your income. Reduce your credit card balances, avoid opening new ones, and lower your debt-to-income ratio as much as possible.
Your lender needs a reason to justify approving the loan. Carrying high amounts of debt makes it harder to do that.
Ask Questions About Pricing Of Local Services
How much is an appraisal in your housing market? How much are real estate agent services worth? Do you know if a certain type of house is in bigger demand than others?
The price war over those homes might be worth skipping for some. But regardless of which house you choose, you will need to pay for the home inspection, appraisal, and any required follow-up inspections.
Know how much these cost in advance for better results.
Learn The Areas Where You Might Want To Live
Not knowing where the nearest school, daycare center, or license renewal facility is located may not hurt your house-hunting choices today. Still, if you don’t know the local area well, you could accidentally select a house further away from ideal commuting routes or conveniences.
Shop Around For A Lender
Shopping around for a lender may sound like a chore, but not all FHA mortgages feature identical terms and rates.
Find a lender willing to work with you and your circumstances and don’t be afraid to haggle; more house hunters leave money on the table due to an aversion to negotiation. Don’t be one of those borrowers!
Build Or Buy?
Ask yourself if you would rather have a house built for you from the ground up on your own land instead of buying a home built for someone else.
Did you know even first-time homebuyers can qualify for an FHA One-Time Close construction loan? Building instead of buying could be a more rewarding option if you aren’t in a hurry to move into a new home and can wait out the construction process.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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