Are you looking to buy or rent a home? Here are 3 important numbers to keep in mind when buying a home as they apply to your transaction!
Your Credit Score If you are looking to buy or rent a home, this little three-digit number is crucial to how easy or hard the process will be; especially in a market that is competitive. If you have great credit, don’t be afraid to flaunt it! Use it as a negotiation tool in order to get a better deal or beat out another potential renter. Keep in mind that a score of 740 or above has been shown to get the best mortgage rates. If your credit score is below 740 you should think about boosting your score by doing the following:
- Pay your bills on time and in full each month
- Maintain at least four open and active lines of credit
- Dispute errors – mistakes happen, dispute errors online through Equifax, Experian, and TransUnion
- Under use your cards – don’t use credit for everything. Stick to the credit utilization ratio of no more than 30% of your limit.
- Raise your credit limit – only if you can trust yourself not to over spend.
As the job market improves and the economy strengthens, mortgage rates will definitely rise. If you’re interested in buying, and you’re thinking of getting a long term (30 year) mortgage, you should make up your mind sooner than later. In fact, every 1% point increase in mortgage rates makes a home about 12% more expensive for buyers.
Complete Cost of Home Ownership When you buy a house, don’t forget that you’ll have more costs than just the price of your home. Your housing costs — which include your mortgage, insurance, taxes, utilities and more — will vary significantly depending on where you live. Be sure to keep in mind that your total home costs should be no more than 25% to 28% of your monthly income and plan accordingly.