Wisest Ways to Finance for a New House
Sunday, February 2, 2014, 1:00 AM | Leave Comment
Financing a house purchase does not have to be an arduous task. A borrower’s income, assets, credit score, and area in which a house is located, can all have a substantial effect on financing options. There are several wise ways to finance a house. An FHA loan, investing in mortgage points, and getting into optimal financial health can be great places to start.
Look at these tips for when you are ready to get into a new home.
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Federal Housing Administration Loan Assistance
Qualified applicants can get help from the Federal Housing Administration. Those approved can buy a house with as little as a three percent down payment. By having a lower down payment barrier, many homeowners have the opportunity of staying ahead of subsequent monthly payments without quickly depleting their savings or other assets on a high down payment.
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Investing in Mortgage Points
Borrowers can help themselves by investing in mortgage points. Depending on plans to stay or sell a house, mortgage points decrease a loan interest rate. Over time, this can add up to significant points. Of course, mortgage points will add to the upfront buying cost, so they may not be optimal for people with little in the way of wiggle room when it comes to down payments and other upfront purchase costs. Breakeven calculators can help borrowers determine if mortgage points are worth the investment.
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Optimal Financial Health
Arguably, the step with the least hassle and potential for risk, fraud, and misunderstanding involves getting finances in order. Homebuyers looking to finance a home need to look at three financial dimensions: current and likely future income, assets, and credit history.
Optimizing those variables gives prospective borrowers much more bargaining power and options when looking for a new house. Realtors prefer to see steady income and credit history when dealing with potential home-buyers. Even luxury homes, such as the properties on www.lucykelts.com, can be surprisingly affordable to a buyer with good income potential, and a decent credit history.
Of course, there are more ways to finance a new house than what is discussed here. Nevertheless, all will involve a borrower’s creditworthiness, and a lender’s appetite for risk and desire to sell a given property.
Real estate is an investment in the community as much as in the cold, hard cash-value of a property. Finding the right community and financing method can save borrowers a lot of headache with regard to home purchase, monthly payment requirements, and other loan terms.
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