Posted 03/23/2018

Mortgages Unlimited Minneapolis 1

Buying a home is so exciting and a big step in a lot of peoples lives. However, without some knowledge about what is involved when purchasing a house, an exciting time could turn dismal real quick. Below are some of the most important things to know before you jump into buying a home.

Know your credit score

Credit score: A credit score is a numerical expression based on a level analysis of a person’s credit files, to represent the creditworthiness of an individual. A credit score is primarily based on a credit report information typically sourced from credit bureaus.

When you’re taking out a home loan, your credit will be one of the key factors in getting approved, and it will help determine your interest rate.

Check your credit before you begin the home buying process. Dispute any errors that could be dragging down your credit score and look for opportunities to improve your credit, such as paying down any debts.

Keep your money stable

Since lenders need to check your credit, you want a solid credit profile.  Don’t open new credit lines, move money around or make huge purchases three to six months before starting the loan process. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible.

Explore your down payment options

Saving for a down payment may seem like it could take an eternity.  First-time home buyer programs are plentiful, including federal mortgage programs with Fannie Mae and Freddie Mac that allow loans with only 3% down.

Here are a few other down payment options available:

  • Federal Housing Administration loans, which permit down payments as low as 3.5%
  • Veterans Affairs loans offer zero down to eligible veterans
  • USDA home loans offer zero down payment in eligible areas

Research state and local assistance programs

In addition to federal programs, many states assistance programs for first-time home buyers with benefits such as tax credits, low down payment loans and interest free loans up to a certain amount. Your county or municipality may also have first-time home buyer programs.

Get pre-approved for your loan

Once you have done some research on down payment assistant programs, meet with a Mortgage Consultant to find out more about these programs and get pre-qualified.  Do this before you hit the web and call on a Real Estate Agent to start your home search.

What is the point of finding the home of your dreams only to find you can’t afford it or there is some unforeseen issue with getting approved altogether?

Understand that there’s a big difference between being pre-qualified and being pre-approved for a mortgage. Getting pre-approved means a lender has looked at all your financial information and they’ve let you know how much you can afford and how much they will lend you.

Know how much you’re comfortable with

Just because you’re pre-qualified for a $300,000 home loan, doesn’t mean you have to spend that much. Be realistic in what you are comfortable with and go with that. You don’t want to feel married to your mortgage or unhappy that you must give up some of the things you enjoy most.

Be cognizant of hidden cost of home ownership

Even before getting into your home, there are the necessary costs of inspection, taxes, home owner’s insurance, possible HOA or condo fees, and appraisal fees.

The cost of owning a home goes beyond your mortgage and utility costs. The upkeep and maintenance are no longer covered by your landlord, so you’ll have to have reserves put away for unforeseen emergencies.

Hire a Real Estate Agent

When hiring an agent to help you in your home search, ask for recommendations. Your Mortgage Consultant works closely with agents and will be able to suggest an agent or two. Family and friends could also make recommendations.

Be clear with your agent on what you’re looking for. Have your list and go over with your agent. It’s rare to find a house that’s perfect in every way, so think carefully about what you’re willing to compromise on and what you’re not. Perhaps no walk-in closet in the master bedroom is a deal breaker, but an outdated guest bathroom will be tolerable until you can renovate it.

Negotiating

A lot can be up for negotiation when buying a home, which can result in major savings. Are there any major repairs you can get the seller to cover, either by fully handling them or by giving you a credit adjustment at closing? Is the seller willing to pay for any of the closing costs?

We are currently in a sellers’ market with multiple offers on homes and you will need to keep that in mind during negotiations. If you’re in a buyers’ market on the other hand, you may find the seller will bargain with you to get the house off the market.

Go with your instincts

Don’t ignore your instincts. Although buying a house can be stressful, not feeling right about a house through some feeling you have probably isn’t going to go away. It’s your life, your house so make sure you feel good about it. It’s not all just about logistics.

 

Mortgages Unlimited is a local mortgage company serving not only the Twin Cities but also, South Dakota, Florida and  Wisconsin. Minnesota Housing programs are not available in South Dakota or Wisconsin. We work on the behalf of our clients ensuring they are getting the best possible loan while providing outstanding customer service.

Give one of our Mortgage Consultants a call @ 763-416-2600 if you are looking to purchase a home or refinance your existing home loan. Or you start a secure online application at www.muiapply.com.

This entry was posted in Helpful Tips, Home Mortgages, Mortgages Unlimited Bloomington Office and tagged , , , , , by Marilyn DiCharia. Bookmark the permalink.

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