Start talking about ARM’s, APR’s, and budgets and most people short circuit.
Financing your home can be confusing but it doesn’t have to be. The Kimmel & Young team have a few tips to help you navigate your way through financing your new purchase.
5 Tips to Financing
- The first step is to start saving for a down payment. Banks require a percentage of your new property be paid for in cash, and if you are serious about buying a home, you can’t start saving soon enough. Even before you determine your budget, you can start putting money aside.
- The next step is to determine how much home you can afford. There is nothing worse than finding your dream home and then realizing it is out of your price range. Use a home loan calculator online in order to help you find a price range based on the amount of your monthly payment, taxes, and insurance.
- It is a good idea at this stage to check your credit. Credit is a key factor on your loan-approval decision and will help determine your interest rate and possibly loan terms. Review your report for accuracy and dispute any errors that could be dragging it down.
- Time to get your pre-approval letter! During this process, a lender will thoroughly examine your finances and confirm how much they are willing to lend you. You should speak to 2-3 lenders for pre-approval in order to find the best loan terms. Having a pre-approval letter can give you the upper hand over other buyers by making you look more serious to sellers.
- Don’t overlook closing costs. In addition to the down payment, you will need to budget for closing your mortgage. You should estimate between 2%-5% of your mortgage for closing. These can be negotiated with a seller in certain markets and you can shop around for cheaper options on some of the costs to help you stay within your budget.
We’re here to help
Our team has over 20 years experience helping our clients navigate through financing their home. Check out our real estate glossary for a quick run through of typical jargon or contact us today to get started with our team!