There are many details you should be aware of before you finance a new home. The process is complicated and you may feel overwhelmed by everything you will need to learn. Here are three important points you should remember when getting started.
- Become familiar with home costs: This refers to the payments you will be making on the home. The four main types of payment you should become familiar with are principal, taxes, interest and insurance. The principal when paid will lower your balance monthly. Paying the interest will go towards the fee assessed for borrowing the money. With the property, there will be taxes that are determined by the county. Finally, there is a payment for insurance, which is required when you purchase the home. In some cases, you will also be responsible for a homeowner’s association fee due monthly if your home is located in a planned unit development.
- Research your credit history: If you want to secure the best possible mortgage you should ensure you have an excellent credit report. What are lenders looking for? They are looking for payments that are made on time and a full and strong credit history. The more credit history the better. It is suggested that before attempting to buy a home you should open new accounts months in advance. We suggest a free credit report to see where you currently stand before applying for a mortgage.
- Learn requirements of lenders: It is important to remember that lenders will examine all facets of your life. They will need the following: your full name, address, date of birth, social security number (SSN), and age of your children if applicable. They will dig a little deeper by researching your employment history, pay stubs, tax returns, bank statements and any other legal or financial documents you may have filled out in the past. Most lenders will provide you with a list of needed paperwork before you get started. You should be prepared to follow the checklist they provide. In fact, we suggest you follow it exactly as instructed and outlined by the lender. Diverting from the requirements will only prolong the situation. If any documents need further instructions you should be able to defend any past dealings easily. Simple Home Solutions is here for you if you have any questions regarding this process. Contact us today.