Get Your Financial House In Order Before You Buy Your New Home

by - 9/06/2017 09:44:00 PM

Whether you’re upgrading, downsizing, or just relocating, buying a new home is an exciting time. But it’s also a very stressful time because there are so many considerations to make. If you dive into it too quickly, you might find yourself purchasing a house that you simply can’t afford. Getting behind on your mortgage repayments can land you in a vicious cycle that is very difficult to break out of. Once the damage is done, there’s no going back, so if you don’t properly organize all of your finances before making any decisions, you’ll find yourself paying the price for the rest of your life. Literally. Deciding on the right price range and finding a good mortgage is only half the battle, you need to sort out the rest of this stuff beforehand.


Pay Down Debt

Having a significant amount of debts is going to throw a spanner in the works when you’re trying to borrow money for the house, so you need to clear them all before you meet with mortgage advisors. Student loans are one of the biggest debts that people have hanging over them but they can be paid off fairly quickly if you use companies like to combine them into one simple repayment. However, student loan debts aren’t usually considered too much of an issue by lenders. You should be more worried about credit card debts which they tend to frown on a lot more. If you start speaking to lenders while you’re still saddled with debt, you won’t be offered anything resembling a decent mortgage.

Prove You’re Reliable

When you go to lenders, they’ll look over your current financial situation. Debts are one thing that they’ll be looking for but they’ll also want to see proof that you will actually pay your bills on time. If you’ve got a long history of late payments that’s always a bad sign. Having a bad credit score is another alarm bell. Missing a few payments in the past doesn’t mean that you’ll never get a mortgage, but you need to make sure that you’ve been on time with payments for a decent period leading up to your application. Sorting out your credit score is also imperative. Paying off all of your debts and making sure that you don’t default on any payments will go a long way to improving your score, but if you’re still struggling, there are other ways to boost your score. Check your credit report because it’s not uncommon for there to be mistakes on there. There may be late repayments on there that you didn’t actually default on. Challenging these mistakes is an easy way to boost your score immediately.  

See An Advisor

The world of mortgages can be very confusing and if you don’t know exactly what you’re signing up to, it will come back to bite you later on. If you’re struggling to understand all of the different terms and rates, you should see a financial advisor. They’ll be able to tell you exactly what kind of mortgage is best for you and help you avoid getting yourself into a bad deal.

If you don’t get your financial house in order, you’ll have trouble when it comes to getting the money that you need for your new home.

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  1. You really provided great information to us. This is really helpful. Thanks for sharing.