Secrets Of Financing Your House Purchase

By: Geri Mason

One of the hardest things about purchasing a home for sale by owner is obtaining the financing necessary.

If you follow these tips you should stand a good chance of obtaining a loan:

Lenders want to be sure that they are going to receive repayment for the loan and go through a fairly rigorous qualification process to ensure that.

Once you know you are going to be purchasing a for sale by owner home, you should then start getting your finances in order. A year to six months prior to the purchase is a good time to start.

Qualifying for home financing is about much more than the size of your down payment.

You can have a sizable down payment, yet be denied for sale by owner home mortgage if the lender deems you as risky borrower. How does the lender determine your risk? By viewing your credit history via your credit report.

Obtain a copy of your credit report from each of the three credit bureaus - Experian, Equifax, and TransUnion - so you know what's on it before your lender does.

Make sure all information contained in your credit report is correct. Dispute any inaccurate information such as accounts that do not belong to you and accounts that are reported as late that were actually paid on time.

Pay off collections and bring pas due accounts current. A good credit history is one of the most critical factors in obtaining financing for a for sale by owner home.

Don't apply for any credit cards or loans in the six months before you purchase the for sale by owner home. Lenders might consider this additional debt as risk that you will not be able to make payments on a for sale by owner home mortgage loan.

Lenders want to know that you have a steady source of income, so don't quit your job. A solid work history is another factor that lenders take into account when deciding to approve financing for a for sale by owner home.

Know in advance how much you can afford to pay each month on a loan. Total up your monthly income and subtract out monthly expenses (except current rent).

This will give you a good indication of the what you can afford to pay monthly on a for sale by owner home mortgage loan. As you shop around for financing, make sure to tell the lender this amount.

You should start saving for a down payment as early as possible. The higher your down payment the easier it will be to obtain approval for financing to purchase a for sale by owner home.

This is because a higher down payment equals a lower loan from the bank. Save as much as you can without falling behind on your other financial responsibilities.

Getting pre-qualified for a mortgage to purchase a home for sale by owner is one of the best ways to shop. This way you know in advance the price range that you should look for in a home and the home buying process goes all the more smoothly.

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