New Home Mortgage: Tips to Consider Before You Apply
Is a new home purchase on your horizon? Here are 10 tips you'll want to keep in mind to make the process easy and enjoyable:
Don't buy a new home unless you plan on staying in the home for three years or longer. Buying and selling soon thereafter can be expensive when you consider closing costs and Realtor commissions when it's time to sell.
Pre-qualify for your loan early in your house hunting process. If you have your financing lined up you will know the price range to target and you will be able to make a stronger offer to the seller.
Improve your credit score. Review your credit report for errors, make your payments on time and don't take on any new debt during the mortgage application process.
Determine your down payment and get assistance if needed. You will need funds for closing, which include but are not limited to lender's fees, attorney costs, title insurance, taxes and homeowners insurance. Talk to your lender to get a realistic estimate of all mortgage related fees.
Buy a little less house than you can afford. You don't want to get into your dream home and then have to stress about making payments if you run into a little bad luck. Lean on the conservative side and have some funds left over to decorate your home or stash away for a rainy day.
Remember the old adage, "location, location, location". Work with an experienced Realtor to choose your desired neighborhoods based on school zoning, convenience to shopping centers, parks and other value-adding features of the surrounding area. Then target homes in those neighborhoods and have your agent help you to determine an appropriate offer price.
Work with your lender to see if fixed or adjustable mortgage rates are better for your situation. Determine how long you plan to be in the home and whether you will rest easier knowing that your interest rate is fixed or if you prefer to have lower payments during the early years of your loan. Think through all of the pros and cons before making a serious commitment.
Have the home inspected by a licensed, competent home inspection company. A home inspection performed before closing can help save thousands of dollars in the long-run by avoiding any unforeseen issues. You can negotiate with the seller to make the recommended repairs identified in the inspection.
Understand all the fees associated with owning your new home before you buy. Is your home part of a homeowners association (HOA)? How much are the HOA fees and what amenities are included? What are your annual property taxes? Will the roof or mechanical systems need to be replaced in the next few years?
Identify a few homes that will be a good fit. Have a backup plan in case your offer isn't accepted or the loan doesn't go through.
Ask the right questions of the experts you work, your mortgage lender and real estate agent. Getting a new home mortgage can be a rewarding experience if you get good advice and do your own research as well.
Rebecca Madej, a Charlotte native and graduate of the University of North Carolina at Chapel Hill, has established herself as a trusted expert in the mortgage industry. The recipient of two Cunningham & Company President's Circle awards, she was named a Five Star professional by Charlotte Magazine in 2009 & 2010.
Madej works with clients to minimize their monthly payments, maximize their equity and weigh the financial advantages of their mortgage. She excels at demystifying the financial process in a personal setting, through a weekly "Monday Money Matters" e-newsletter and on her blog at
rebeccamadej.com.
New Home Mortgage: Tips to Consider Before You Apply
By: dwalizer
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