Getting Your Ducks in a Row
There are a few great programs available right now for home buyers. We have posted about a few of them, MMA, CHFA Advantage, MCC to state a few. We have also mentioned the great possibilities of looking into an A.R.M. The main key is to gather the facts, do your research, and discuss with your lender what options are best for you. But where do you begin?
For starters, when you are wanting to purchase a home you need to establish how much can you afford monthly? Without regards for what a computer model says you are approved for, HOW MUCH CAN YOU AFFORD, and still live! This means you need to write ALL of your expenses down on paper or look into websites that help with budgets, such as mint.com, budgettracker.com and powerwallet.com to name a few. It is hard to see the big picture if you don’t have a starting point. Knowing what your comfortable with for a monthly mortgage payment is hard to determine if you don’t have a starting point. And you will be surprised as to how much you really can afford. One trick I used myself was to look at my bank statements for the last two months to see where I was spending my disposable income. Low and behold I was spending in places I wasn’t even aware of. This made feeling more comfortable with a new house payment, that much more comfortable.
Once you know your desired monthly mortgage payment, the next step is to determine how much money do you have for a down payment. Do you have money for a down payment? If not, then you know you need to get down payment assistance (DPA) or see if you have a friend or family member who will help you by giving you “gift funds”. Your funds for down payment goes a long way in helping a lender determine your available loan options. If you don’t have funds for down payment and are not wanting to use DPA or gift funds then you need to start saving and need to know how much do you want to put down. Discussing with your lender well in advance can help you determine your savings goal.
Then the next thing to consider is how long do you plan on being in this property? Are you planning to move within 5, 10, 15 years? Or is this your “final” home purchase? This is another factor when determining your loan options. For example, it may not make any sense for you to get into a 30 yr fixed home loan when you are planning on only being in the property for 5 years. All of these factors should be thoroughly considered and then discussed with your lender. A good lender will then guide you into the appropriate loan for you (and your family).
If you are not aware or haven’t heard of the aforementioned programs, please take the time to research. You never know if one of these might be a fit for you.
If you would like to get started now, give us a call, shoot us a message or complete our secure online loan application.
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