Are you ready to buy?

5 Things To Know


WHAT YOU CAN AFFORD

Owning a home makes great financial sense. In order to determine how much you can afford, there are many mortgage calculators available online. Fannie Mae offers several on their website. Here are a few high level guidelines: Assume a 28% tax bracket, if yours is higher, then your savings will be as well. So, if you’re currently renting, take your monthly rent, multiply it times 1.32. Completing this calculation gives you an idea of the mortgage payment you can afford. Because of tax deductions, you can make a mortgage payment (including taxes and insurance) that is approximately one-third larger than your current rent and end up with the same amount of income.


IMPROVE YOUR CREDIT

Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for. Take the following actions right away: correct errors in your credit report, pay down credit card bills, wait until after you’ve closed on your new property to buy things on credit – such as new appliances, don’t open new credit cards, shop for a new mortgage all within a very short period of time, avoid finance companies – their fees are horrendous, even if you pay on time!


Creative Ways to afford a home

Investigate local, state and national assistance programs, get the seller to provide financing, get help from your family and friends, or lease with the option to buy are just a few ideas to get you started.

 


Typical Buyer Closing Costs

Downpayment, Loan Origination Fees, Points/Loan Discount Fees, Appraisal fee, Credit Report Fees, Deed Recording Fees, Title Insurance Policy Premiums, Inspection Fees, Notary Fees, and any prorations for expenses the seller may have paid in advance.


How to Protect Yourself During the Contract Phase

There are many ways to protect yourself when you present an offer on a house that you’ve just fallen in love with. Home Inspection, Appraisal and Financing are 3 of the standard contingencies that can be used to ensure you’ve made a good decision and to ensure you can move and should move forward with the purchase.