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Home Buyer Financing Tips

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By : R Smith    99 or more times read
If you are thinking about buying a home, one of the first things to do is find out what price range you can afford. Getting pre-approved for home financing can determine your maximum home price and loan amount, based on credit scores, income, and down payment. A pre-approval can save time and effort in your home search, and lets others know you are ready and able to buy a home.

Hereís a List of Other Home Buyer Financing Tips:

Need flexibility on mortgage qualifying?
In addition to a low down payment, FHA home financing allows lower credit scores than conventional home financing. A bankruptcy only needs to be discharged for 2 years, and 3 years on a foreclosure.

Need payment choices for a tight budget?
Some lenders offers flexible mortgage terms with a 30 year fixed rate that gives you a payment choice each month for interest only or a fully amortized payment, which could help when money is tight.

Do you want an option for lower closing costs?
If you need to reduce your closing costs, you typically have the choice of decreasing the points by increasing the rate. Mortgage rates are priced to allow you to buy the interest rate up or down.

How long will you keep your mortgage?
If you plan to keep your mortgage for less than five years, you may be able to save money on your payments with a 5 year fixed rate plan. Also consider home financing with zero points.

What debts are counted in your debt ratio?
Monthly debt payments are added to a mortgage to calculate a back-end debt ratio, including: credit card minimum payments, car loans, student loan, personal loan, alimony, child support, tax liens.

Are you required to have an impound account?
An impound account is money collected with the monthly loan payment to be set aside in reserve to pay property taxes and insurance. Itís usually required on mortgages with less than 20% down payment.

What about opening new credit accounts?
Applying for a new credit card, or financing the purchase of anything, just before or during the mortgage process can drop your credit scores, and lower credit scores can cause a higher rate or worse.

Are you planning a job or career change?
If you plan to make a job change, especially if the change involves commission or a different line of work, wait until after your home financing is finished, to avoid creating a potential problem.
Written by Rick Smith: Current mortgage rates, and information about new homes in San Diego

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