If you have been considering financing a home, condo or townhouse versus losing money on renting your home, consider these three tips from Chicago real estate agents before you choose to finance. Without properly understanding the different elements of buying a home, you could be getting yourself into more than what you bargained for.
1 – Credit Score
According to CreditKarma.com, 1 in every 3 people do not know their credit score or have a good understanding of what credit rating is. When it comes to buying property, your credit score will greatly determine your ability to purchase your new home. If you have had a history of poor credit, you will likely encounter issues with how much you will actually qualify for and at what interest rate. Conversely, if you have an excellent credit rating and history of making your payments on time, you should not have any problem qualifying for more to put into your house at a lower interest rate and also with a lower down payment.
2 – Down Payment
Your down payment is another key factor to understand when purchasing a home. Of course, the higher the down payment you can pay, the less you will owe and pay in interest in the long run. However, for most of us, you likely do not have thirty thousand dollars just lying around for a down payment. If this is the case with your situation, there are a few additional options to try to boost your down payment.
First, you may want to ask friends and family to loan you the money. Although awkward, your friends and family likely won’t lend you money with an interest rate. Second, even if you do not own your vehicle or vehicles, you can work with your auto lender to refinance your payments and loan you money for the depreciated value of the vehicle. In most cases, either of these options will help you with a larger down payment.
According to most Luxury Chicago Real Estate experts, figuring out your down payment is the most important thing in determining your eligibility for a new condo, townhouse or single-family home. If your down payment is not significant enough, you might need to consider a neighborhood outside of the windy city.
3 – Mortgage Terms and Conditions
Once you have an understanding of your credit score and know the amount you will be able to put down on the property, you are ready to start the loan approval process. According to most real estate experts, the loan approval process is the toughest part. Any lender will put you through a grueling process before deciding whether or not to lend you the funds you need. Once approved, you will then need to have a comprehensive understanding of what you are signing up for. You will want to thoroughly, thoroughly understand property taxes where you are moving (for instance, taxes in a big city like Chicago will vary greatly from a small, rural town), insurance (what exactly do you need to ensure at your property) and finally, who needs to be on the title of property (is it just you, your spouse, etc.).
For more tips and tricks about real estate in Chicago, visit www.chicagosluxuryrealestate.com.