John Pasciuti's Blog
Buying a home is one of the biggest purchases that you’ll ever make in your lifetime. You’ll spend decades of your life making mortgage payments to pay off your home loan. Buying a home is more than just simply finding a place to live. It’s also a financial decision. Your home helps you to build equity, gives you tax deductions, and helps you to have some security in your financial future.
One of the biggest questions that you’ll have when you buy a home is “How much can I spend?” To answer this question, you’ll need to dig a little deeper.
Do You Have Money For A Down Payment?
The standard amount of money that you’ll need for a down payment is 20 percent of the purchase price of a home. If you don’t have the money for a full down payment, you’ll need to pay for private mortgage insurance (PMI). This could add up to be an extra cost of hundreds of dollars per month in additional insurance payments on top of your mortgage and every other kind of expense that goes along with buying a home. You’ll need to take the time to save up for a down payment if you’re a first time homebuyer. If you already own a home, the equity that you have in that home can help you with the down payment.
What Are Your Other Financial Responsibilities?
There’s more to buying a home than just the monthly mortgage payment. You’ll need to get insurance, pay taxes, and have some money set aside for repair and decorating costs. You’ll need to look at your monthly income to find out just how much you can afford on a home. You should take an honest look at your lifestyle and existing expenses in order to determine a comfortable monthly mortgage payment for you.
Know Your Credit Score
Your credit score will be a major factor in how much house you’ll be able to afford. Your lender will use your credit score and credit history to help determine what type of interest rate you’ll get and how much they’re willing to lend you in order to buy a home.
Understanding what you can afford for a home purchase is crucial before you even start shopping. It’s a good idea to meet with a lender to get pre-qualified. This is different than getting pre-approved. Your lender will give you a general idea of how much you can spend on a home without digging too deep into your finances. Getting pre-qualified is a great place to start when you’re looking at the numbers of being a homeowner.
Filling out a mortgage application may prove to be a long, arduous process, particularly for those who are buying a house for the first time. Lucky for you, we're here to help you dot the I's and cross the T's on your mortgage application to ensure you can quickly and effortlessly acquire your dream house.
Now, let's take a look at three tips to help you prepare your mortgage application.
1. Be Diligent
A mortgage application may appear daunting at first. The application may include several pages of questions, and you may have only a limited amount of time to finalize your submission.
When it comes to completing a mortgage application, it generally pays to be diligent. If you answer each mortgage application question to the best of your ability, you likely will have no trouble moving forward with your home purchase.
2. Avoid Guessing
If you're uncertain about how to respond to certain mortgage application questions, there is no need to guess. Instead, search for the information that you need to provide a comprehensive response. This will help reduce the risk of encountering potential problems down the line that otherwise could slow down your home acquisition.
Remember, guessing on a mortgage application probably won't do you or your lender any favors. But if you allocate the necessary time and resources to understand mortgage application questions and provide thoughtful responses, you can minimize the risk of application errors.
3. Ask Questions
Completing a mortgage application sometimes can be tricky. Fortunately, a lender employs mortgage specialists who are happy to respond to your application concerns or questions at any time.
If you're unsure about information that is requested on a mortgage application, don't hesitate to reach out to a lender's mortgage specialists for help. These specialists possess extensive mortgage expertise and can help you complete a mortgage application.
Furthermore, mortgage specialists can offer insights into a wide array of mortgage options. These specialists can explain the differences between fixed- and adjustable-rate mortgages and enable you to select the right mortgage option based on your financial situation.
As you prepare to buy a house, you may want to consult with a real estate agent as well. In fact, with a real estate agent at your side, you can seamlessly navigate the homebuying process.
A real estate agent understands exactly what it takes to acquire a house, regardless of the finances at your disposal. This housing market professional can set up home showings, help you submit offers on houses and ensure you can purchase a residence that matches or exceeds your expectations. And if you need help getting a mortgage, a real estate agent may even be able to connect you with the top lenders in your city or town.
Ready to move forward in the homebuying journey? Use the aforementioned tips, and you can finalize a mortgage application and secure the financing that you need to acquire your ideal residence.