Are you thinking about investing in some Alabama real estate? How about New York or Las Vegas? Wherever you choose to put money down for an investment in some land or a home, there are some things that you'll want to consider to make sure that you're financially ready to take on the burden of a long-term mortgage.
If you're thinking about buying real estate in the next year or so, here are five things to take a look at first.
1. Fix up your credit report - Get a copy of your credit report from each of the major credit bureaus. The three big credit bureaus are Experion, Trans Union and Equifax. You can get copies of your credit report through their websites for a small fee.
Once you get copies of your credit report from each one go through each report and look for any mistakes, old accounts, or reports of items that have been cleared up. The more things that you can get removed from your credit report the easier it will be for you to get the financing you need.
2. Save a down payment - It used to be that mortgage companies and home loan lenders would want you to have at least 10 percent of the home's price saved as a down payment on the home. Today that is just not realistic and often lenders are willing to accept a down payment as low as 2 or 3 percent of the home's value.
Some lenders offer loans that don't require a down payment, but in the end you will pay a lot more in interest for those types of loans. If you can save at least a 2 percent down payment you will be able to get much better terms on a loan.
3. Shop around for mortgages - There are a lot of lenders that are willing to give home loans so don't make the mistake of taking the first loan that you're offered. Shop around and compare interest rates and other terms offered by lenders to make sure that you get the best deal that you can get.
4. Make a budget - Since you're borrowing the money to buy a home or other real estate, you might be tempted to borrow a lot of money and buy more than you can realistically afford. Consider the monthly payments of the mortgage carefully because you will be making those payments for a long time.
5. Reduce your debt - The more of your debt that you can get rid of before you take on a home loan the better off you'll be. So pay off credit cards, cars, and any other debt that you can before you are ready to start shopping for real estate.
Whether you are looking at the hospitable southern state of Alabama for real estate, a luxury home in San Francisco's exclusive Pacific Heights, or a condo on the Las Vegas strip, the rules are the same: Clean up your credit, save a down payment, and get rid of monthly debt payments and you'll find that getting a real estate loan becomes a much easier process.
Your local RE/MAX office in Alabama (http://www.remax-alabama.com/alabama-real-estate.aspx ) offers listings of Alabama real estate for sale and specializes in finding you the perfect Alabama home. The author, Billings Farnsworth, is a freelance writer.