Although you might be tempted to rush out and start house hunting, the truth is that there is a right and wrong time to buy. Unless you are prepared to make this type of investment, you could find yourself being denied a loan. Therefore, the most important thing is to get everything set up first so that when you do go to buy, the process will be quick and easy, but more important, so you buy the home you want.
The bottom line is that by delaying the purchase of a home, you would have time to come up with a better down payment, take time to get your credit in better condition, and be prepared for all the responsibilities that come along with being a homeowner. We highly recommend you take time to aggressively tackle problems so you can secure a good loan and at a good interest rate.
For example, if you were to rush into buying a home but you have not taken adequate time to devote to credit cleanup, you might find yourself paying high points and a much higher interest rate than someone does that has paid down some bills or paid off debt. The difference could be thousands of dollars that would be better spent on decorating your new home or adding new landscaping.
A common mistake made by people interested in buying is that they place themselves in a position of bad cash flow. In other words, they tie up all their money so that after closing on the new home, they find paying monthly bills difficult and no money left over for recreation or leisure time. The better solution is to wait a little while to build up a small nest egg and reduce the amount of debt you have so you would not be faced with a cash flow problem. The result would be living in the home you want while enjoying it
far more.
As mentioned, if you are not in the right position to buy a home, you could also be faced with expensive points. Keep in mind that if you plan to stay in the home for a long time, then paying points could be advantageous by saving you money long-term. On the other hand, if you plan living in the home five years or less, then paying points count cause serious concerns. However, if you are not prepared to buy the home from a financial standpoint, you could be charged high points, costing you unnecessary money.