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Essential Factors to Consider When Purchasing a Home

April 22, 2012 | Comments: 0 | Views: 172

Although it seems to be a daunting task, purchasing a home is in fact a worthwhile and exciting one. Doesn't it feel good to take a tour of every house on sale and to choose the perfect one for you and your family? After all, your home will serve as your haven for many years to come. It doesn't matter if you sweat under the scorching heat of the sun or walk several miles just to find that home you've been dreaming of. As a potential homebuyer, there are some important factors for you to consider.

First, you have to know how you will be able to have your home loan approved. Lending institutions take into account various factors to decide whether to grant a certain loan or not to a borrower-homebuyer. For example, lenders will determine if a loan applicant has the capacity to pay the monthly home mortgage. This is the most important consideration for lenders before giving out a loan. As you might already know, it takes a huge amount of cash to finance a new home sufficiently. If your employment and financial records show that you cannot afford to buy a certain house, the lender definitely won't approve your real estate loan. The lender will evaluate your capacity to pay by looking into your income and liabilities through your income tax returns, your salary, your credit report, and your credit cards. Before you apply for a home loan, get a copy of your credit report so that you have ample time to have any error fixed right away.

Specifically, lenders examine a loan applicant's total obligation ratio and housing ratio. The total obligation ratio refers to the percentage of the income that can be allotted to housing costs and other expenses such as credit card bills and car loans. The ideal total obligation ratio is 42 percent at most. The housing ratio consists of the taxes, insurance costs, mortgage payments, maintenance costs, and other expenses that will be incurred after the purchase of a house. If your housing ratio is equal to or lower than 36 percent, then you have a good chance of getting your home loan approved.

The second factor to consider when buying a home is when you will obtain the loan amount after your loan is approved. A notice of loan approval from your lender will arrive five to 10 business days since your loan has been pre-approved. The exact waiting time depends on the volume of applications being processed by your lender at that time. But generally, you will wait for about four to six weeks from the start of your loan application before your dream home will finally be yours.

Buying a home entails some planning -- but you don't have to be a real estate expert to be able to do this. All you need are a little research and professional guidance to make your home purchase worth your time and money.

Peter Jordan is a realtor in Westfield New Jersey who offers homebuyers free assistance in appealing their property taxes. For more information, visit http://www.njpropertytaxappeal.net

Source: EzineArticles
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