Purchase A New Home!

Here is What You Need to Know About Mortgages

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Let me take you through some of the steps of getting a mortgage. Buying a home isn’t as simple as just writing a check or picking up a mortgage when a seller accepts your offer. You need to invest some time in preparation to speak with a mortgage broker.

The lenders will decide what they think you can afford. And then you’ll apply for a mortgage pre-qualification. This pre-qualification letter gives you more leverage when making an offer on a home. And this process will have most of the mortgage application process completed, making it easier to buy a home.

Should I Continue Renting or Buy a Home?

Examine your choices carefully to figure out whether you should buy a home vs continuing to rent one. Mortgages have many advantages, especially tax benefits. Usually payments on a home are less money each month than rent. Additionally, when you sell a home it is like getting paid principal returned to you. Rent, on the other hand, has been referred to as just throwing money out the window. However, if rents are low in your area and property prices are sky high, it is best to rent. If you plan on moving in a year or two, possibly renting is the better option. You need to weigh the pros and cons of each and take a good look at your future plans.

How Much Can I Borrow?

Your lender will let you know how much they think you can afford, when you ask to pre-qualify. However, you can get a good idea yourself right now. Write down all your monthly payments for your bills. Include everything from insurance, utilities, car loans to credit card bills. Total that then deduct it from your take home pay. You’ll also need to consider the costs of owning a home such as home insurance, property taxes and possibly mortgage insurance.

Check How Much You Can Afford!

Consider These Costs Also:

Down payment: Your down payment will be 3% - 30% of the home’s purchase price. The higher the down payment the lower your monthly payments will be. If your down payment is less than 20% you will usually have to pay mortgage insurance, which is a cost in addition to your home insurance.

Closing Costs: This cost can vary, as sometimes buyers will pay them for you, but they typically run 2% - 6% of the amount of the mortgage.

On-going Costs: Your housing costs can include the following:

  • Mortgage Payments

  • Homeowners Insurance

  • Mortgage Insurance

  • Mortgage Insurance (for some buyers)

  • Flood Insurance (if in the flood zone)

  • Property Taxes

  • Utilities: Electric, Gas, Trash, Water, Sewer

  • Maintenance

  • HOA Fees (for condos)

Feel free to call me for help in answering these questions. It can seem overwhelming. I’m happy to walk you through all of these steps to help you make the decision on whether or not it is the right time for you to buy a home.

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