April 7th, 2018 8:19 AM by Jackie A. Graves, President
Are you thinking about
buying a house this year? We’ve got tools and resources that will help you get
your financial house in order as you prepare to look for that perfect place to
call home—and shop for a mortgage that’s right for you.
Just as in 2017, the
supply of homes for sale is expected to remain low in 2018. Fewer homes for
sale can drive up home prices and competition. There are things you can do to
be more prepared to put an offer on the home that’s right for you and make sure
you successfully close on your new home. Our homebuying tools and resources
will help you know what to expect—and what questions to ask—at each step in the
Your first homebuying
step: Check your credit
You can start your
journey off right by getting familiar with your finances and your credit. Your
first step should be to check
your credit. An error
on your credit report can stop you from getting the best rate you’re
eligible for when you borrow money. With a 30-year mortgage, a higher interest
rate will really add up over time. If you do find an error on your credit
report, follow these steps to dispute
The median down payment
in 2017 was ten percent.
ASSOCIATION OF REALTORS
Next, decide on your down
you’ll get the best terms and rates with a down payment of 20 percent or more.
However, many people can’t afford to put down that much. Assuming a purchase
price of $200,000, a 20 percent down payment would be $40,000. Even if you can
afford a hefty down payment, it may not be a good way to spend all your money.
You’ll also want some cash set aside for closing costs and for unexpected home
repairs and other expenses after you move in.
In 2017, borrowers took
out more than 3 million loans with a down payment of 10 percent or less. Down
payments of less than 20 percent mean that the homebuyer may need to pay private
mortgage insurance (PMI) or pay more interest on a loan. One of the most important
early decisions is what to spend on your down payment; that way, you can focus
your search on homes and price points that are right for you. Learn more about
how to decide on your down
Buying a house and
choosing the right home loan
Our step-by-step Buying a House tool
walks you through every step of the homebuying process, including exploring
your loan choices and comparing offers to get the right mortgage for you.
saving a fraction of a percent on your interest rate can save you thousands of
dollars over the life of your mortgage, so it definitely pays to prepare,
shop around, and compare offers. Using the example below, a 0.25 percent
interest rate increase will cost you more than $2,000 in interest payments in
the first five years. Over 30 years, that quarter point difference will cost
you nearly $10,000.
Mortgage interest rate
Our tools and resources
can help you make smart homebuying decisions
Interest Rates tool lets you plug in some of the factors that affect your
interest rate. You can see what rates you might expect—and how changes in these
factors may affect interest rates for different types of loans in your area.
What influences your interest rates? Read our blog post, "Seven
factors that determine your mortgage interest rate," to find out.
Visit our Buying a House tool
to set you up for homebuying success. And make sure to sign up for our Buying a
House newsletter for weekly emails.
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