May 29th, 2017 8:38 AM by Jackie A. Graves, President
Figure Out Preliminary Finances
though a down payment is helpful to reduce the amount that you need to borrow,
it's not necessarily required for first-time buyers. Ask mortgage lenders about
programs that allow you to buy a home without a down payment.
you will need to have enough money to make a monthly mortgage payment.
you're going from renting to buying, be aware that what you can afford for rent
may not be the same as what you can afford for a mortgage. You need to include
the cost of homeowners insurance, property taxes and perhaps homeowners
You Don't Have to Max Out Your Loan
you pre-qualify, mortgage lenders will give you information on how much you can
afford if you apply with them. Pre-qualification is a look at your basic
financial information, including debt-to-income ratio and credit rating. What
lenders don't have is a list of your monthly expenses, such as food, gas and
savings, so know your monthly limit.
mind that just because you qualify for a certain amount, doesn't mean you have
to apply for that amount. It may be exciting to think about buying a house you
thought was out of your reach, but this is why having a budget before you meet
with lenders will keep your finances in check.
Don't Forget About Additional Fees
expenses to consider before you can finalize your home purchase are earnest
money and closing costs.
you submit an offer on a house, you pay earnest money as proof that you are
serious about buying the house. Earnest money helps protect the seller's
interest. Your real estate agent will help coordinate this transaction. If you
back out of the sale, the earnest money goes to the seller, but if you buy the
house, the earnest money is applied to your purchase.
your mortgage lender about closing costs. That can be around 2 to 5 percent of
the purchase price, but you might be able to negotiate to have the seller cover
the costs. It usually means that the seller raises the purchase price, but it
allows first-time buyers to get into a house with less money up front.
Be Able to Maintain the Property
you own a home, calling the landlord when the hot water isn't working is no
longer an option. You're responsible for any repairs or updates your home
needs, and you want to keep everything in good working order to maintain the
property value. It's important to be aware of your housing costs beyond your
mortgage payment so you can be prepared financially.
Chelsey Bowen - To view the original article click here