Your credit score will give information to future lenders about your creditworthiness. This tells them how good you have been in maintaining your records, such as paying bills on time, no defaults, how you manage your credit cards and other debts. Is their any negative remarks against your name etc.In case you find a suspicious activity against your name on credit report, report immediately in writing to all three major credit score companies. This report also can be used to fix any wrong address or name in credit report. Bottom line this report lets you know where you stand on credit rating and how good chances are of getting a loan on a decent interest rate. The higher credit score means more attractive loan offers from lenders.
Once you have checked your credit score and are satisfied with the needs of lending companies, next thing comes checking your financial situation. First thing what is your current assets vs. current debts. Are you in position to keep a large portion of salary aside for future mortgage payments without disturbing current obligations.
Do simple math, if your salary take home is $5000 and your current expenses including any debt payments are around $2000(including rent $1000). That means you are left with $3000 in your bank. If you are looking a house for which monthly payment will be $2000 and after deducting from remaining balance you are left with $1000. Next deduct your property tax from $1000. Let's assume another $400 dollars (Property tax vary from state to state). You are left with $600. You still need to factor in home insurance, landscaping, misc. cost related to owning a home
Once you have checked your credit score and are satisfied with the needs of lending companies, next thing comes checking your financial situation. First thing what is your current assets vs. current debts. Are you in position to keep a large portion of salary aside for future mortgage payments without disturbing current obligations.
Do simple math, if your salary take home is $5000 and your current expenses including any debt payments are around $2000(including rent $1000). That means you are left with $3000 in your bank. If you are looking a house for which monthly payment will be $2000 and after deducting from remaining balance you are left with $1000. Next deduct your property tax from $1000. Let's assume another $400 dollars (Property tax vary from state to state). You are left with $600. You still need to factor in home insurance, landscaping, misc. cost related to owning a home
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