Moving house is one of the biggest and most important events that anyone can have in their life. For many people, their home is their largest and most important asset and investment. Understanding the home buying process is important in getting a good deal and mortgage. However, there are several financial mistakes of your past that could stop you from moving house. These are:
Bad Credit
One of the most difficult aspects of moving house is getting approved for a new mortgage. If you have credit issues in the past, this can all the more hurt your chances of getting a loan. A fixed rate mortgage is one of the most common types of mortgages that are available, but having credit issues in the past can hurt your chances of qualifying for these types of loan. If you have any bad credit history, it is important to try and have that cleaned up by the time you try and move house.
No Job
One of the most common ways in which a bank checks the history of a person is through their employment history. Whether it is fair or not, people are judged based on the type of employment history that they have. A person with a strong employment history is considered much more bankable than someone that has no employment history. If you are out of a job right now it may be best to get a job and work there for a couple of months before trying to get approved for a mortgage through a bank.
Wrong Time In The Market
Buying and selling a home is all about timing in the real estate market. In every area of the world, the real estate market is based on timing. There are times when it is much easier to buy a home, and there are times when it is much easier to sell a home as well. Knowing your local real estate market will help immensely with deciding on the right time to buy and sell of a home.
Saving Too Little to None
One cannot stress enough how important it is to have a savings account set up. For people who are planning to move and apply for a new mortgage, most banking institutions would look into how they handle their bank accounts. Make sure to regularly save up even just a minimum amount monthly. Building a 12-month cash reserve will certainly look good in your mortgage application compared to having no savings at all. Remember, the money saved is not just for your plan to move, but it will come in handy anytime you need an easily accessible savings account in case of emergencies.
Conclusion
Taking these points into consideration months or years before you actually move will increase your chances to move house successfully. It is important to sit down and honestly look into your finances and plan out the best course to take. Don’t let your past financial mistakes ruin your chance for a better life.
