Whether
you're a first-time homebuyer or you've bought before, there's a lot
you can learn when it comes to the subject of borrowing money to buy
your dream home. When buying a home for the first time, the process
can be somewhat overwhelming--and this can lead to hasty
decision-making that often ends in regret. If you've borrowed money
to buy a home in the past, you might want to consider doing thing
differently the second or third time around. If you're thinking about
borrowing money to buy a home, don't go into it blindly--check out
these 8 helpful borrowing tips for homebuyers.
Improve
Your Credit Score
If
it's been a while since you last viewed your credit report, find out
where you stand before you go asking for a home loan. Your credit
score will be scrutinized by prospective lenders, and if it's less
than stellar--the number of borrowing options available for you to
choose from will decrease significantly. If your credit could use
some TLC, take some time to improve it before you begin approaching
lenders. Devote at least six months to improving your credit, if
possible, by paying your bills on time, paying down your credit cards
and other loans, and not making excessive purchases that don't fit
within your budget.
Don't
Borrow More Than You Can Afford
Just
because you're approved for a larger-than-life loan doesn’t mean
you should take it. Don't buy a home that's way beyond your
means--and don't borrow more than you can afford to pay back. The
cost of your home each month including your mortgage payment,
property taxes, homeowners insurance, and maintenance shouldn't
account for more than 28% of your income. Going above and beyond that
could put you into a financial hole that will seem impossible to
climb out of.
