Buyers Guide to Home Ownership
You've already heard the phrase, "get your ducks in order"!
1. Know your money history. Have you been slow on credit? If so, How long ago? You may have recovered from past credit mistakes.
2. Find a mortgage lender who will help you to work through how much you can afford and type of mortgage that is appropriate for you. It is okay to shop around for the best rate. However, there may be other pieces in the application that may cost you more money. Here are some questions you can ask; What do you charge for appraisals? Is there a charge for re-appraisals? What is the charge for title insurance? What is PMI and when does it come off the mortgage? You want to meet this mortgage lender and form a good relationship because you will be working closely together throughout this process. Another aspect to consider in the process is the closing cost. How much will an attorney charge to close the home? How often are the taxes paid within the town that the house is being purchased? This will make a big finical difference in the end. Note, that taxes are paid in advance. Depending on the closing date you may be getting money back. Remember, there are NO secrets between mortgage lender and yourself! If you are purchasing this home with someone else, it is important to have an open conversation about you are looking for. Examples: How big of a home do you really need? How far is the work commute? How important are schools to you, including other aspects such as sports, theatre, and other opportunities?
3. Where is the money coming from? If family is planning on giving you money, make it clear because you are required to have a gift letter stating that you will not be paying the funds back. If you have co-signed any loans for your family this will be considered a debt to you.