There are many different steps to buying a home that you must take before you can officially make your purchase. Most people assume that the most important part of this process is finding a home you want to live in for many years to come.

However, this is only part of the challenge. When you go from buying vs renting a home, your financial situation will likely change. Instead of paying rent each month, you will have a mortgage. You will also be responsible for any repairs that need to be done to your house. This can be accomplished through a rent to own program, or by simply purchasing your own home without interacting with a renter.

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When you are learning how to buy a home, it is important that you take into account how your financial life will change after you purchase the house. While it is impossible to account for every expense that will come up along the way, there are certain aspects of the purchase you can plan for.

Below are some factors you should take into account before you close on your dream home.

What credit score do you need to buy a house?

Very few people begin the process of buying a house with enough cash on hand to complete the purchase. As a result, most individuals need to take out a loan in order to finance their new house. Therefore, banks and other lenders will need to take into account your credit score to buy a home.

First time home buyers may be wondering, “What is a good credit score to buy a house?” There is no specific credit score you need to be approved for a home loan. However, if you are interested in buying a home with bad credit, keep in mind that you will probably be required to pay more over time.

If you have a lower credit score, lenders will usually charge you a higher interest rate as you repay your loan. This, in turn, can cost you thousands of extra dollars beyond what you borrowed.

In any case, you should try to have a relatively high credit score to buy a house.

This will also affect the type of loan you are eligible to obtain. For example, the Federal Housing Administration (FHA) may be able to give you a loan if your credit score is in the 500s. However, other companies may need you to have a score in the 600s first.

Source: https://uploads.pl-internal.com/ZTdlYjY5MWEtMWY3MC00M2YwLWE4NGEtNWFiN2IwNTUxZjVj/content/2018/05/fha-loan-infographic.jpg

Check with different lenders to determine what you need before you apply. You can also receive a free estimate of your credit score online. Click here to obtain an estimate.

Money-Saving Tips for Buying a House

When you are buying a home, there are different ways you can save money. Some of these include:

  • Searching for foreclosure homes you can obtain at a major discount.
  • Applying for first-time homeowner discount programs in your state.
  • Putting a larger down payment down on your purchase to save you money long-term.

Additionally, consider moving to one of the cheapest states to buy a house. If you are not sure where you want to live, this is a good way to help you reduce payments and cost of living. Some of the least expensive states to live in are:

  • Mississippi.
  • Indiana.
  • Oklahoma.
  • Missouri.

How long does it take to buy a house?

When you are going through your buying a house checklist, make sure you take into account how long it will take to close on your purchase. From looking for your home to having the purchase be finalized, the process usually takes anywhere between one and four months.

However, this can vary depending on your circumstances.

As you are learning how to buy a house, it is important that you plan your timeline accordingly. This is especially true if you are going from renting a property to owning your own home.

Here are some factors to keep in mind to help you save money as you transition from one type of home to another:

    • Plan your lease accordingly – When you buy a new home, you will have many up-front costs you will be responsible for paying in the first few weeks. To avoid making double payments on your new home and your old one, make sure your lease ends around the time you are set to move into your new home.
    • Have a back-up plan in case your purchase is delayed – When you are buying a home, there may be some unexpected delays. If you have already moved out of your former apartment or house, make sure you have an emergency fund to help you afford staying in a hotel until you can move into the new house. Alternatively, make plans to stay with a relative or friend until you finalize the purchase.
Source: https://35eyfp3jobuh2xcp1moqyj13-wpengine.netdna-ssl.com/wp-content/uploads/2018/01/first_time_home_buyer_infographic1.jpg