Debt Management pointers for homebuyers

Kindly written for Roots Real Estate by Patrick Young of ableusa.info

Most people dream of buying their first house, but actually doing so can be a challenge financially. However, taking steps to manage your debt in the months approaching a home purchase can mean the difference between acquiring the home of your dreams or settling for less. Use these debt management tips from Roots Real Estate to position yourself for a home purchase.

Organize Your Business Affairs

If you're a business owner, pay particular attention to organizing your finances so lenders can assess your income correctly. You also protect your personal property and gain tax advantages with smart business decisions, such as forming an LLC. Although forming an LLC only takes a few steps, it's important that you follow the LLC Georgia rules for formation since regulations differ in each area.

Find Deals

Get more bang for your buck by finding a bargain. You could reduce expenses by renting out a room or a tiny home on the new property. Look at the available properties in the areas within which you’d like to move. And pay attention to the median sale price and the market trends for that area so that you can spot a great deal when you see one. If the current costs are rising and the number of properties sold is high, then wait. You will have more negotiating power when the market is slower. For instance, now would be a good time to buy in Atlanta because the number of homes sold is 48% of last year, and the median sale price is at a dip.

Another idea is to buy a house as is. Get a thorough inspection so you understand what the property requires to be livable and the cost of repairs. You may have to contend with a leaky roof, mold, mildew, pests, or structural issues since the seller is not responsible.

Monitor Your Credit

Don't be surprised by your credit score or history at your loan request. Credit monitoring services keep you updated and alert you to any suspicious activity. If you find errors, contact the entity that furnished the erroneous information to attempt to correct your file. Identity theft protection can restore your profile if your data is compromised.

Track Your Spending and Follow a Budget

Take control of your accounts by determining where your money is heading. Save your receipts or use an app for easier tracking.

Next, set a reasonable budget. Studies show you are more likely to reach a written goal, so write down your money plan. Review your spending plan with the family to keep everyone on board.

Prepare for Additional Home Purchase Costs

You also need to prepare for your down payment and closing costs. Research which programs allow you to roll closing costs into your loan or if you're in a market where the seller may cover that expense. Various government grants and nonprofit programs can help you come up with a down payment as a forgivable loan.

Eliminate Debt

Avoid new debt in the months before a home purchase since that lowers your credit score. Reduce unsecured debt, such as your credit card usage and personal loans. If you don't trust yourself, freeze your cards to avoid using them.

While some people destroy their cards, keeping your oldest cards active helps your rating stay high because it increases the age of your credit history. Consolidating debts can help you manage your payments but can cause a temporary dip in your score.

Find Professionals Who Can Help

Use a bookkeeper or accountant to keep your business finances in order and make decisions that lead to tax advantages. If you need help with a plan for personal debt, a credit counselor analyzes your financial situation and guides you to appropriate choices.

As you search for homes, share your financial details with lenders to pre-qualify for loans and discover homes within your price range. Pre-qualification is only an estimate and won't affect your credit score. Share the information with your real estate agent, who can find the right property much more quickly than you can alone.

Make the Right Financial Choices for Your Home Purchase

Buying a home is a big decision and investment, so make sure that you are ready before you invest. Try not to be impatient if your finances aren’t quite in the right place yet. You will be far happier waiting a few months or years to avoid struggling with the upkeep and mortgage for your new property. Keep your debts low and your finances strong as you get closer to buying a home. Intelligent financial decisions will make your process easier.

When you are ready to buy a property in the Atlanta area, contact us at Roots Real Estate. Our dedicated professionals will help you to find the perfect property for your needs.