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Tips & Tricks
What can you afford? Sit down and run the numbers – put together a financial plan to determine how much home you can afford. Using a mortgage calculator is a great tool that can give you a ballpark number.
Should you get prequalified? Preapproval is a good way to check on your price range for a home, it also ensures that once you find your dream home, you’ll be able to move quickly.
Down Payment – So how much will you need? This will depend on the purchase price of the house and your loan program. The down payment is a percentage of the purchase price ranging from 3.5% up to 20%. The more you can contribute the more attractive and less risky you’ll be to lenders.
Interest rates – Don’t believe everything you hear on TV (or read on the internet); the only person who can lock in a rate for you in a certified mortgage loan officer.
Be an informed buyer. Do your research; know what you can afford and what it is that you’re looking for in a home. Have a question? ASK! Whether you ask your realtor or your mortgage loan officer, our job is to make the home buying process and easy and as smooth as possible.
Five things NOT to do
- No major purchases or new financing! Resist the urge to deck out your new home and refrain from buying anything that could create debt; this means furniture, appliances, electronics, jewelry, vacations, cars etc….
- Don’t change jobs. Lenders love to see a consistent job history, job-hopping however…not so much. Any major changes (even if your paychecks are the same) could risk your approval.
- Don’t move money around. When applying for a loan, lenders look at bank account histories and any large sums deposited or withdrawn could raise red flags. Gifting (of the down payment) is completely legal, but be sure to ask a mortgage professional how to go about this.
- Stay on top of your bills. Any slip ups could send your credit score spiraling down and could jeopardize your loan approval.
- Don’t have inquiries made into your credit. Inquiries made related to your mortgage search don’t usually affect your credit (under the assumption you’re rate shopping). Any others? Looking for new credit translates into a higher risk for lenders. Don’t risk it – hold off until after closing.