STRATEGIES
MAKE A PLAN
Making sure your future monthly mortgage payments are made on time, will be the most important part of home-ownership, so decide on a monthly home payment that you are comfortable with. Utilize our mortgage calculator to see how much you will pay monthly for P.I.M.I. [principal, interest and mortgage insurance [if any] ]
Remember, you will have to pay property taxes and homeowners insurance as well. Depending on your loan program, this may be paid in installments alongside your P.I.M.I [principal, interest & mortgage insurance]. If you will be purchasing in a planned unit development, you will have to pay home owners association [HOA] fees as well. Be sure to factor that in your total monthly payment.
MANAGE YOUR CREDIT
Utilize credit wisely. Carrying too much debt can become overwhelming and should anything unexpected happen, this could lead to missed mortgage payments. It’s important not to overextend your credit cards and other debts so you can stay current on all your payments. When you decide to start looking for a home, check your credit report and credit score with any of the 3 major credit reporting agencies: Experian, TransUnion and Equifax. If you find any mistakes that need to be corrected, addressing these issues early will put you in a better position.
BE PREPARED
Know your cash to close. Your deposit DOES NOT include closing costs. To purchase a home you will need cash for a down payment and cash for closing costs . The down payment ranges from 3% to 20% or more. Less than 20% down or if your loan if financed through the FHA, you will be required to pay for private mortgage insurance. Closing costs range 3-7% of the total loan amount and will include charges such as loan origination fees, title insurance and appraisal fees etc.
RESEARCH MORTGAGE OPTIONS
GET PRE-QUALIFIED
Knowing how much you can borrow will let you keep your search focused on the homes that are right for you. Getting pre-qualified will provide you with an estimate of how much you can borrow and will also provide you with an estimate of your monthly mortgage payment. It is important to note that the pre-qualification process only estimates your monthly payment and those numbers will change once you choose a home.
RESEARCH YOUR UTILITIES
Consider, if you are moving into a larger home than you’re used to, a home that is newer or older than you’re used to or relocating to a state with a climate that’s hotter or colder, your monthly utilities will not be the same as you are used to. Be sure to ask your real estate professional to find out what the average energy bills have typically been. This will help prevent surprises if you receive a higher utility bill than you’re used to . If you’re moving into a new community, find out the range for property taxes of other homes that have closed prior as the taxes will change once the home is completed and assessed by the taxing authority.
DON'T FORGET MISCELLANEOUS EXPENSES
Be sure to budget for moving expenses and additional maintenance costs. Keep in mind that you should have an emergency fund on hand to prepare for any unexpected changes in your income (like reduction in your wages) or unexpected expenses (like medical bills).