Mortgage Advice When You Need It- is necessary if you want to do it right, and save time…
Many first-time home buyers are at a loss when it comes to knowing all the pros and cons of obligating themselves to the largest debt of their lifetime. Seasoned homeowners know more than they probably did the first time. * This post has been updated.
This does not mean you are not smart, intellectual, or not in touch with reality, however, mortgage lending is very detailed.
This is why Mortgage Loan Facts has created this website. We wanted you to get the right advice before you tackle the project. This is also why we are writing this Mortgage Advice -Getting the Right Advice When You Need It the Most article here.
Some Helpful Information Online
It is easy to read a lot about mortgage lending online. What to do, how to do it, and when to do it. It is everywhere, from many who have never worked in mortgage lending or know little about getting the right mortgage financing, or the right house, or being fully prepared for the cost of owning a new home.
Yes, mortgage lenders want to make you a loan, if they are responsible lenders, they also want you to be financially able to repay the loan. Real Estate professionals want to help you find that home, however, they want to know upfront that you can finish the deal and buy the home.
However, it is not quite that simple and you need to have your groundwork done before you start out on the process. This is why we are writing this Mortgage Advice article here on Mortgage Loan Facts.
Take The Time To Understand All of The Steps Is Important-when getting mortgage advice when you need it
It is impossible to tell you everything you need to know in one or even two articles. However, the initial groundwork is one of the most important steps to making sure you are headed in a successful attempt to find the home you love to buy. If you have this done ‘right’ your Real Estate Agent, and then the Lender is going to love to work with you to help you succeed.
Understanding the cost of buying a home is utterly essential for success for all parties. No one succeeds if you cannot afford what you are working to do.
There are some individuals who do not have to worry about expenses, getting qualified, or making their mortgage payments. They are conservative individuals who have managed their financial status well. Some have saved up front, cut expenses upfront, or they may have family that can contribute, and have been gifted monies to do what they need. Not all people fall into this status, and it is not the average person actually. It takes being
To be confident and feel secure when buying a home, it takes being conscious of all the costs involved before you start. Your spending habits are important as knowing when you need to curb your spending, and not allowing yourself to get in a financial bind. This also includes being happy with what you can afford, not what your best friend can afford.
Steps To Getting Prepared For a Mortgage Loan
In this period in our country, everyone needs to be financially savvy. Know upfront if you can afford to look into buying your new home. Why, because if you are educated about your own financial status, you will know exactly what you can afford, and you will stay within that range. That is if you are smart.
You should ask yourself these questions first:
- Do I have sufficient income to afford an increase over what I am paying now for housing? Can I afford the house payment plus, housing insurance, taxes, mortgage insurance (if the loan to value is greater than 80%), and any other expenses for this new home? Depending upon the type of property you buy; single-family dwelling (house), or condo. If you are buying a condo, you will have added the Home Owners Association fee. (HOA)
- Do I have reserves left after I pay for everything I am paying now? How much, and what may increase once I buy a home? **If you do not have reserves after you pay everything you are paying now; you may need to keep working on your financial health. You need at least two months’ reserves after closing a loan.
- How much down payment can you afford? Do you have at least a 5% down payment if getting a 95% conventional loan, plus a closing cost of approximately 3 to 5%? There is also a conventional loan with a 3% down payment. Yes, the seller does often help with the closing cost, however, usually, it is added to the sales price of the home. If you do not want mortgage insurance, then in conventional financing you would need a 20% down payment. **each loan product has rules concerning the seller paying the costs.
Downpayment For Getting a 95% Fixed Rate Loan
Depending upon where you live; a home sales price of $250,000 with -a 5 % down payment would be $12,500. *estimates only. Your closing cost after the down payment would be within a range of $11,875.00.
Loan Estimate
**See the Example of the Loan Estimate that you must receive at the loan application. This form gives total detail of fees and charges that you can expect depending upon the lender, the loan amount, etc.
Your lender is then required to give you a Loan Disclosure 3 days prior to closing with the final fees. These are examples only, however, these are the documentation you must have with all totaled fees, closing costs, and down payment figures.
These two disclosures will educate you on the charges entailed in getting mortgage financing. This is one of the most important parts of getting a loan. Understanding the fees that lenders are allowed to charge is important. Some lenders may offer no closing cost, however, more than likely you will be charged a higher interest rate.
Loan Disclosure – will give you details of all closing costs…
*there are 5 pages to the loan disclosure-view here
Additional Questions To Ask Yourself- when looking for advice prior to purchase
- Will my necessary expenses increase? The utilities, health insurance, life insurance, groceries, medical, dental, clothing, child care (if applicable), (child support, if applicable), expenses of getting to work (will I be closer or further away), and any other necessary expense.
- Will I be able to curb my unnecessary expenses of cable TV, going out to eat, entertaining, etc., if necessary?
- Am I willing to let the unnecessary expenses go in order to afford a home? Going out to dine every weekend, and sometimes during the week. This is where you must be honest with yourself and what you are truly willing to do to afford a home.
- Do I have a budget, and am I willing to stay within my budget for the long haul? Making a budget is important, and sticking to that budget is more important. If you have a budget and you fall outside of that budget, you are headed for financial woes that can make your life uncomfortable. Financial problems can cause family issues.
Summing Up
This post will help you know the estimated down payment practices, loan closing fees, and charges. Can you financially afford to start the mortgage loan process?
We will see you back here with the other mortgage information you need.
Do not get discouraged…you can do this when it is right for you! Make it happen!
