Wondering How To Finance Your Next Home Purchase?
The First Step
Do yourself a favor and meet with a few lenders BEFORE you make an offer on a house. In Tallahassee you only have 5 days from the contract date – the date that both buyer and seller agree and the two sets of names are on the sales contract – to make your loan application if you want to retain the 15-day Finance Contingency (The option of terminating the contract and getting your deposit returned if you cannot get satisfactory financing.) Do some research and comparisons BEFORE you make an offer to avoid adding more stress to the home buying process.
How Much House Can I Afford?
Most online calculators will only show you the Principle and Interest part of your monthly payment. This can be very misleading. A loan officer will calculate taxes, homeowner's insurance, and mortgage insurance and add them into the monthly payment. The loan officer will consider your likely utility bills, maintenance costs and homeowner association fees, and review your income sources, debts and credit scores. By going through the pre-approval process, you will truly know how much house you can afford.
Lenders are less willing to take risks than in prior years and require good-to-great credit scores. A letter from a loan officer attesting to your pre-approved loan amount will make your offer on a house much stronger than an offer that does not include this assurance that the buyer can afford the house.
Learn How to Buy a House
A good Realtor® will walk you through the steps of the home buying process when you first meet. Even if you have purchased a home before, it's good to review the time frames and contingencies of the current contract in use to avoid potential problems and misunderstandings.
Shop for Mortgage Interest Rates and Mortgage Options
Do some comparison shopping among mortgage lenders. Your real estate agent should be able to recommend a few loan officers if you need to know where to start. Interest rates and loan availability can vary widely from lender to lender, and from week to week. A home loan is available for different lengths of time, with 30 years and 15 years the most common. The longer the loan, the more money you will pay out in interest over the life of the loan. The shorter the length of the loan, the greater your monthly payment will be. With a loan officer, work through your optimal combination of down payment amount, borrowed amount, length of loan and interest rate to determine the monthly payment and mortgage product that best suits your budget.
Once you have an accepted contract, call a few loan officers you have met with to find out who has the best mortgage lending option for you and apply for your loan.
Work with a REALTOR®
Work with a real estate professional to get the most house for your money. We handle hundreds of real estate transactions over the course of our careers, and we can counsel buyers through the complex home buying process.Call me at 850-567-9181 to arrange a meeting.