The current real estate condition is intimidating to most buyers especially the first-timers. Prices are soaring sky-high making it seem unaffordable day-by-day to own a property here in California. With salaries remaining flat while cost of inflation increases, most buyers had hardly saved up for down payment. Therefore, qualifying for a loan becomes another hurdle to becoming a homeowner aside from increasing prices.
Why and how then do several homeowners move around to higher-priced and nicer communities? How wonderful life is to belong and be among this group.
Waiting is over. Just do it!
- Start saving from each pay check. No matter how difficult the budgeting is, set aside a percentage of your income regularly. Saving for the down payment will increase your marketing power when time comes to buy your dream house.
- Protect and improve your credit record as much as possible. These can be done by paying all bills timely. Seek professional help for a fee or for free, depending on the loan broker that you choose to work with.
- Increase your buying power by avoiding major purchases before your house purchase. Avoid buying a new car or furniture until your escrow has closed. Why? Your debt-equity ratio decreases as more credit card charges are made or, your down payment towards the new property gets compromised as other bills share its usage.
- Keep a stable job. Loan approval becomes more difficult for buyers who just recently moved to a new job or totally changed careers. This move makes a buyer seem unstable for the lenders. Risk is higher when someone is new not just due to absence of historical trend but for the higher probability of loss of future income.
- Maintain a balanced banking relationship. It is best not to move funds around or exhibit irregular activities in bank accounts. Lenders look at several months of bank statements to assess the financial condition of the buyer. Sudden deposits or withdrawals of large sum of money may paint a negative picture to the lender.
- Minimize credit record inquiries. Points are deducted from the FICO score whenever creditors inquire about one’s credit record for a given period of time. Avoid filling up credit card applications just to get those free sodas or gifts. They are not worth decreasing your ability to borrow money for the purchase of a property!
- Contact a loan broker and realtor you can trust who will represent your interests.
- Finally, having done due diligence, you are ready to buy. Be not afraid, DO IT!