Buying a new home in Lafayette can be an exciting and as equally frustrating experience for many whether you are a seasoned home buyer, or it is your first time.
Now that we have entered the new year, it is time for a refresher on buying a home in 2020. Here is everything you need to know as you embark on this often complicated journey.
What to Expect in 2020
The housing market in the United States is different each year. Sometimes the market will contract and other times, it will expand. So, if you are planning to buy a home in 2020, you need to understand how these market fluctuations are going to affect you.
New construction is gaining momentum this year so there will be more options available for homeowners who are looking for a bigger selection. However, there is also a high cost that can come with owning land. You will need to understand this as well if you are seriously considering new construction.
Before Buying a Home
Before you purchase a home in Lafayette, there are several things you should have on your to-do list ahead of time to ensure a smoother and less headache-inducing experience.
Check Your Credit Score
Before you even apply for a loan, you need to check your credit score. This could mean the difference between a lower interest rate on your loan versus a much higher interest rate. It also directly impacts you as this is what the bank is looking at prior to loaning you money.
Improve Your Scores
If your credit scores are not as high as you thought they were, you can follow a few steps to help raise them ahead of applying for a loan on a new home. To improve your credit scores, make sure you are paying all your bills on time. If you have high credit card debt, pay down the debt as much as you can. You should have a credit utilization ratio of less than 30 percent.
Don't apply for new lines of credit or close current lines of credit, and if you find any discrepancies on your credit reports, make sure to dispute them to clear them off.
What Can You Afford?
Now you have to know what you can afford. To determine this, you can use an affordability calculator. It can provide you with an estimate of what you could possibly pre-qualify for and what you can afford to borrow.
Your Down Payment
Next comes saving for your down payment. If you do not have the money for a down payment, you will have to pay Private Mortgage Insurance (PMI). This is an added insurance charge that a mortgage lender adds on as protection in case you default on your loan payments. This can ultimately cost you several hundred dollars each month, and none of that money will go against the principle of the mortgage.
You should also learn how to budget your money so you have the funds for unexpected expenses that could possibly pop up during the home buying process. Some of these expenses can include a home appraisal fee, closing costs, property taxes, home insurance, and more.
If you need more advice or guidance on the home buying process in Lafayette, IN, contact the experts at Titan Lafayette Real Estate today.