Financing Information for First Time Alamogordo Home Buyers
The steps to purchase a home
This is much different than simply figuring out how much your mortgage is going to be and fitting it into your budget. This is a very important first step in learning about your finances and all that comes along with a mortgage. (for more information about pre-approvals check out my Abilene Texas real estate affiliate)
A lender will sit down with you and examine your finances and determine by your debt to income ratio what your budget can really afford and then state a figure to max that out at. Just because the lender says you are approved for a certain amount, you may not want to spend that much. Don't think of it as the number you have to come close to but as the absolute maximum your income can support.
This is great ammunition for buyers to present with their offer as it shows sellers you are serious and have already done the homework necessary and can truly afford the property.
- Review the different types of loans
Compare fixed-rate with adjustable rate mortgages. Look down the road. Where will you be in 15 years, 30 years? What obligations might you have? Take those things into consideration as you choose a loan. A good lender will lay out all your options and the pros and cons of each.
Shop Around. When you're ready to get a loan, explore your options. You can choose either a direct lender or a mortgage broker.
A direct lender has money to lend and makes the final decision on your loan. Brokers are intermediaries who choose from many lenders. A broker may be able to help find you a loan if you have special financing needs, but he or she willÂ also receive a percentage of what you borrow. Keep these items in mind when pricing out a loan for Alamogordo real estate.
• Interest rates
• Broker fees
• Points (each point is one percent of the amount you borrow)
• Prepayment penalties
• Loan term application fees
• Credit report fees
• Appraisal costs
Gather all the documents you'll need to verify your loan application. Lenders will want to know your job tenure, employment stability, income, assets (property, cars, bank accounts and investments) and your liabilities (auto loans, mortgages, installment loans, credit-card debt, household expenses and others).
You'll need to provide documents such as paycheck stubs, bank account statements and tax returns. Check with your lender or broker for more information.
- Clear up any financial problems.
Do you have credit problems or owe money to the IRS? Buying a new home may still be a possiblity. Contact a financial advisor or tax resolution service to find solutions. Your lender can also map out a plan for getting your finances on track and a time line to be in your new home!
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