Posts Tagged pre-qualification

Your New Home

Things to know before you buy:

Before venturing into the territory of homebuying, there are several things you might want to consider. Below is a list of ten things every potential homebuyer should consider:

Get pre-qualified for a loan

Early in the home buying process, find out what you can afford to spend. This will help you make informed decisions about which homes to look at, which one to ultimately select and possibly what the bottom line asking price should be on selling a home you may already own.

Know your credit rating

Marginal or bad credit can make a big difference in the type of financing available to you as a homebuyer. There may be special programs out there to help you repair your credit, but it helps to know what you’re dealing with up front.

The down payment

You will probably need some sort of down payment on any property you purchase. While some loans offer a no down payment option, it makes a huge difference in your monthly mortgage payment when you are able to provide a substantial down payment on the property. For more information on down payment programs available in your area, consult with a lender to find the right program.

Closing costs and other considerations

The cost of making the purchase can include charges such as:

    1. Escrow fees
    2. Title policy fees
    3. Mortgage Insurance
    4. Fire and Homeowners Insurance
    5. County Recorder fees
    6. Loan origination fees

Points

Some loans will have “points” attached. Points are a loan origination fee that is equivalent to 1% of the loan amount. You may incur a higher interest rate if you choose a loan with no points, but there are many different combinations available. Shop around for the most competitive deal.

Types of mortgage loans

Would you prefer a fixed rate or adjustable? This will depend largely on where the interest rates are when you are shopping for your loan. If rates tend to be higher, you may opt for an adjustable rate so that you are able to take advantage of any rate drops that may occur during the life of your loan. If rates are low, you might want to lock in the best rate while you can.

Loan categories

There are two types of loan categories out there. These are Conventional Loans and Government Loans. Conventional mortgage loans are offered with either fixed or adjustable interest rates. Mortgage insurance may be required depending on the loan. Government loans include Federal Housing Administration (FHA), Veterans Administration (VA).

Low to moderate income

If you fall into one of these categories, you may qualify for special programs geared towards helping the low to moderate income homebuyer secure financing. Lenders who specialize in real estate mortgages can help you find these types of programs.

Mortgage Insurance

Conventional loans with a larger down payment may not require mortgage insurance, however, it is always required on the FHA loan. This insurance is meant to protect the lender in the event of default.

Home loan counseling

Many organizations offer classes to potential homebuyers to help prepare you for the process. Topics covered may include: realtor selection, home selection, homeowner responsibilities, saving for a down payment, and loan program information. These classes can be especially helpful

Posted in: Real Estate Tips

Leave a Comment (0) →

Tips for Mortgaging Your New Home

You’re close to finalizing the purchase of your new home. It’s getting near to closing time, and you’ve haven’t set up your mortgage yet. For most people, their houses are by far the most expensive purchases they will ever make. Sometimes the pressure that comes from deciding a proper mortgage can be taxing and draining, and if you’re not careful, you could end up paying for your bad decision, literally. In this article, we’re going to discuss several tips for mortgaging your new home that will help you get the most for your money.

If Possible, Pay Off Current Debt.

Credit card use has steadily increased throughout the the past several years, and many people are falling into the trap of having now, and paying later. The problem with credit cards is that their average interest rates are double that of interest rates for mortgaging a new home. If you can pay off some of the debt you have now, it will better serve your budget when you’re committed to paying for a house. You don’t have to pay off all your debts before you decide to purchase a home, but the more you can pay off now, the better you can use your money later.

Find a Trusted Reliable Bank.

When thinking about where you’ll be placing your mortgage, it’s important to find a reliable bank that you trust. If you’re going through a realtor, he or she will often a list of trusted banks with whom you can work. Also, it can also help to do your personal and business banking with the same branch that you have your mortgage. Often times you can get a small percentage break if they can take your mortgage payment directly out of your checking or savings account. Remember, a percentage break when we’re talking years of payments and thousands of dollars is a very important. Any discount you can get helps you in the long run.

Make Sure Your Mortgage is a Fixed Rate.

Some banks and mortgage companies might tempt you with a special start out interest rate with an extremely low percent, but be leery of accepting these offers. Fixed rates are more reliable in that you can always know what your payments are going to be, and you don’t have to worry about your payments ever spiking because of changes in the market. While fixed rates might seem higher at first, they’ll save you money long term.

Financing a new home should be an exciting experience, not a taxing one. If you follow these tips, you can be on your way to enjoying your new home!

Posted in: Housing Market, Real Estate Tips

Leave a Comment (0) →

Make and Save Money While Financing Your New Home

Setting up your mortgage can sometimes feel confusing and draining, because most people don’t want to end up paying for a mistake they made years ago. What many people don’t realize is that if done correctly, financing your new home can actually help you save and make money. In a previous article, we looked at three tips to help set up a proper mortgage. First, it is very helpful to pay off as much debt as you can before you commit to purchasing a home. The more you can pay off now, the less interest payments you’ll be making later. Next, find a bank that you trust. By doing both your personal banking and home financing in one place, you have a better chance of getting a small percentage break on your interest rate. Every discount helps when it comes to one of if not the biggest purchases of your life. Finally, fixed rates offer stable, long term savings on your new home. In this article we’re going to briefly discuss how you can build on these insights to help make you money.

Set Up a 30 Year Mortgage.

There are two common choices when it comes to the length of mortgage contracts for your new home: 15 years and 30 years. Where you might think it would be better to set up a 15 year mortgage, you can actually save more money by setting up a 30 year account. Setting up a 30 year mortgage will stretch your payments out so that your required monthly payment is roughly half that of a 15 year mortgage. Saving money comes into the picture when you take that extra money that you save on your initial payment, and you pay on top of your premium. By having a low payment, but paying extra on the premium, you put more money towards directly paying off the house. If you do this consistently and correctly, you’ll actually be able to pay off your house in roughly 15 years, while paying less money to the bank for interest.

Save and Invest Access Money.

Besides taking some of the money you save on a 30 year fixed rate and paying down on your premium, you can save and invest that money. Many banks and brokerage firms offer return rates of long-term investments of 6-12% percent. Where this might not seem so significant now, if you can save and invest for 15 years, not only will you pay off your mortgage, but you’ll have money in the bank on top of that to do with as you choose.

Mortgaging a new home can be stressful and confusing, but if you follow these tips, you’re on your way to making your money work for you!

Posted in: Real Estate Tips

Leave a Comment (0) →