The real estate market is continuing to improve with borrowers of once underwater mortgages now seeing themselves above water. That's good news for lender, seller, and buyer alike as it supports reports that home sales are on the rise and properties are staying on the market for a shorter length of time. Inventories are increasing as well as sales, thereby making it all the more positive for people transacting business in the real estate marketplace. If you are in the market for a home then, you'll want to get pre-qualified first so you can short-list the Cincinnati properties that fall within your budget range.

Gain Assistance from a Real Estate Professional

Regardless of the economic climate through, making the decision to buy a home is one of the most expensive undertakings you'll make in your life. The experience can produce a variety of emotions, including joy, fear, stress, and anticipation. In order to make a good buying decision then, you have to be prepared for the process. Therefore, it's best to lean on a real estate professional so you can make a more informed decision.

Some of the Steps You'll Need to Take before You Start Your Search for a House

So, before you begin house-hunting in Cincinnati, you'll need to prepare yourself accordingly. That means you'll need to establish a record to show that you regularly make your payments on time. You'll also need to refrain from taking out any kinds of loans or applying for credit cards in the interim. In addition, you'll need to pay down any lingering debt if you want to make pre-qualification and qualification simpler.

Review Your Credit Report

You'll need to check your credit report too as that's one of the first things a mortgage lender does when you try to prequalify for a mortgage. Review the report to make sure there's nothing on it that is incorrect or will cause a lender to become suspect. If you have any payments that you've missed or which were late, you'll need to explain the circumstances to whomever is pre-qualifying you for a loan.

Stay on Top of Your Finances

Reviewing your budget and credit report is helpful as doing so will prevent any future budgetary difficulties. You don't want to become house poor or end up paying so much for your home that you can't afford vacation travel, a new car, or entertainment.

How to Gauge Which Homes Fit within Your Budget

Sometimes a dream house can turn into a nightmare, especially if you feel you can't afford anything but your house payment. When you are surveying your budget then, try to look at homes that average less than 2times that of your income. So, if you make an income of $80,000, you should look at homes that are just under $200,000 in price.

Coming Up with a Down Payment

You'll also need to consider the down payment you will make, or the upfront payment that is used to lower the loan amount. Naturally, the bigger the down payment, the smaller the amount your loan will be as well as the monthly payments. Naturally, coming up with this kind of cash can be a tall order for some Cincinnati real estate buyers. After all, you have to factor in closing costs too, including escrow amounts for insurance and property tax, title insurance, loan origination fees, etc.

Ways to Save for the Down Payment

You have several alternatives for coming up with additional cash. You can either limit your spending for several months or save any extra money that you're given. For example, make it a point not to spend your tax refund or overtime money.

Obtaining the Down Payment in the Form of a Gift

Or, perhaps, you have a relative you does not mind giving you the cash. It's not legal to borrow money for a down payment unless you can show that the money is an obligation and you're still able to qualify. If not, the mortgage lender will need to see a written affirmation that the down payment money is not a loan but, instead, a gift.

Making it a point to review your budget and cleaning up your credit, if needed, is essential if your goal is to own a home in the Cincinnati real estate market. As the real estate marketplace is on the upswing today, you want to make sure that you can stay above water, so to speak, when you buy a home and start paying on a mortgage. You will be able to meet your payments if you set up a budget before you get pre-qualified. By the time you buy your home, you'll already be acclimated to saving money and meeting your monthly bills.