Top 5 tips for homebuyers

From questions to confidence—feel at home while buying one

Buying a new home is a major decision, but it doesn’t have to be intimidating. Here are some tips, so you aren’t surprised along the way.

                                   

                       Take the advice

Your real estate agent is your partner and a valuable asset. He or she knows the neighborhoods and schools, and will help negotiate a fair price for the house you want. Your Mortgage Banker can answer questions about how much you can comfortably afford and provide guidance at every step. Get opinions from those you trust, such as your family and friends.

Understand your costs

In addition to your monthly mortgage payment, you also pay interest, taxes, private mortgage insurance (if your down payment is less than 20% on a conventional loan) and several one-time fees at closing. These closing costs typically range from 2–6% of the total amount of the mortgage loan. Make sure you know the total cost. (View chart (Click to view chart in modal window) (Opens Overlay) to understand how much you may have to pay for private mortgage insurance).

Know your score

A good credit score increases your chances of being approved for a mortgage and may lower your interest rate. If your score is low, try to improve it by making your payments on time, paying the monthly minimum (or more) and keeping your existing credit card accounts with zero balances open.

Find your range

Your monthly payment should be no more than 28% of your gross monthly income. You can get an estimate of how much you’ll be able to borrow by being prequalified for a mortgage. You will need to provide some basic financial information and a lender determines how much you may borrow. Prequalification is simple and usually can be done in one conversation. You may choose to prequalify online or speak with your local  Mortgage Banker.

Get organized

You’ll need to provide various documents, such as pay stubs, bank statements and tax forms. Make sure you know what papers you need and have them readily accessible. A Mortgage Banker can help you determine what documents are needed.

This entry was posted on Wednesday, February 5th, 2014 at 12:57 pm and is filed under Buying a Home, Mortgage, Real Estate Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.