Buying a House
Having your house is good and can be exhilarating sometimes. If you are going to buying a house, you must know if it will be a built house or a building a new house. Getting your house finance can take any turn, either you get loan from bank, or go to the builder for in-house financing or even private lenders financing.
READ: Mezzanine financing
Tips on how to finance a house
- Get your credit reports
Before you can say ‘I wanna finance a house‘, you must know your credit score if it’s above 650 or below. The average range for a credit score is usually Between 350 to 800. If you have a credit score that falls around 450, it definitely shows you have a bad credit report which will definitely make it hard or not able to collect loan from the bank. You get loan from the bank if you have a good credit score of like 650 and above. The main purpose of this credit report is to show the bank that you are trustworthy enough to return the money with interests at the right time or month due.
- Get your bank account balance
Get to know the amount of money in bank and at hand. If the money is enough for you to add to the loan to get the house bought or built. Financing a house can be easy but it is actually tougher than it looks because most things that looks easy are actually the ones that turns out you being the hardest. Get your financial details if you will be able to finance the house. You must know that there will be mortgage payment in which you must know the amount coming in for you to know if you will be able to finance the house.
READ: How to pronounce finance
- Get the house to be financed capital
You should know what the house to be financed cost. This is so because it gives you edge and also gives you opportunity to saves some money.
For example if the house to be financed cost $120,000 and you have a loan of $140,000. This actually saves you $20,000.
- Consider the mortgage payments
There are different types of mortgage payment to buy a house. E.g. Bank and credit unions mortgages. I this, the bank or the credit unions offer any of the two type of interest rate or the hybrid. The banks can offer fixed interest rate or the variable interest rate or the hybrid. In the fixed interest rate, the bank offers the borrower to be paying a particular amount of mortgage down payment till the end of the deal while the variable interest rate has the interest rate changes from time to time. In the hybrid, the borrower might pay a low amount of interest for the first year and then pays a large amount of interest Rate towards the end of the month due. The interval in the variable interest rate is usually a year while the hybrid has its fixed interest for some years and then changes to variable interest rate.
Another example is the private mortgage In which the borrower have to meet with the estate agent if it is built or the builder if it’s a startup building to get his help in financing the house. The builders or the estate agent does in-housing financing in a way that they get to their private financing companies to get loan to build the house for the borrower and the borrower will have to be paying with interests every month or annually.
READ: How to finance a car with bad credit
- Compare the interest rate and mortgage payments from different sources
The mortgage payments charged and the interest rate varies from one lender to another. Some lenders would charge high rate while some will charge low. You should compare the banks charges. Compare the charges with your income if you are capable of paying for the interest rate and mortgage payments. Get the down payment that matches with your income and will be very easy for you to pay as you may lose your house if you could not provide at the month due.
Get the documents signed. You should get every documents necessary on the house signed and the promissory notes if you have a private mortgages.