Tips for buy­ing a home in to­day’s mar­ket

The Progress-Index - At Home - - News - STATEPOINT

If you’re con­sid­er­ing buy­ing a home, some ex­perts think you should get a move on it. In­ter­est rates are at 65-year record lows and na­tional home prices have fi­nally hit bot­tom and are on the rise. De­spite what you may be hear­ing, loans are avail­able for those with good credit his­to­ries, sta­ble in­come and suf­fi­cient sav­ings.

But don’t jump right in un­pre­pared. Whether you’re a sea­soned buyer or a new­bie, there are strate­gies that can help you through­out the home-buy­ing process:

Stick to Your Bud­get

De­ter­min­ing how much “home you can af­ford” de­pends on sev­eral fac­tors, in­clud­ing your an­nual gross in­come, credit his­tory, cur­rent mort­gage rates and the amount of your down pay­ment.

In to­day’s mar­ket, you can ex­pect a down pay­ment to gen­er­ally be be­tween 5 to 20 per­cent of the pur­chase price for a con­ven­tional mort­gage. Lenders rec­om­mend that your mort­gage pay­ment (prin­ci­pal, in­ter­est, taxes and mort­gage in­surance) be less than 28 per­cent of your monthly gross in­come.

Be­fore look­ing for a home, con­sider call­ing a De­part­ment of Hous­ing and Ur­ban Devel­op­ment-ap­proved hous­ing coun­selor for free and con­fi­den­tial fi­nan­cial as­sis­tance.

Avoid Bor­row­ing Pit­falls

Un­scrupu­lous lenders can dam­age your credit and cause you fi­nan­cial hard­ship. Here are some ways to avoid be­com­ing a vic­tim:

• Say ‘no’ to easy money. Be­ware if some­one claims that your “credit prob­lems won’t af­fect the in­ter­est rate.” If a so­lic­i­ta­tion is really ap­peal­ing, get it in writ­ing and seek a sec­ond opin­ion.

• Talk to sev­eral lenders to find the best loan.

• Know if the loan of­fered to you charges a fee if you pay it off early. If it’s a re­quire­ment of the loan, ask about other prod­ucts that don’t con­tain this type of penalty.

• En­sure doc­u­ments are cor­rect and com­plete. Be­ware of any­one of­fer­ing to fal­sify your in­come in­for­ma­tion to qual­ify you for a loan. Never sign doc­u­ments that have in­cor­rect dates or blank fields.

• Ask for writ­ten es­ti­mates that in­clude all points and fees. When you get to the clos­ing ta­ble, if any fees or charges dif­fer from what was pre­vi­ously dis­closed, de­lay clos­ing un­til all terms are un­der­stood.

• If you’re tak­ing eq­uity out of your prop­erty, only take the min­i­mum. Eq­uity typ­i­cally builds slowly over time, so it’s im­por­tant to try to pre­serve it.

• If you’re not sure, don’t sign! Get ad­vice first from a rep­utable con­sumer credit coun­sel­ing agency or hous­ing coun­selor.

Know the Mort­gage Process

Mort­gages are se­ri­ous long-term fi­nan­cial com­mit­ments. Se­lect­ing the right mort­gage may make a big dif­fer­ence in your monthly pay­ments and over­all cost of your loan.

To de­ter­mine the best term for your per­sonal sit­u­a­tion and one that aligns with your fi­nan­cial goals, talk with your lender or fi­nan­cial pro­fes­sional for guid­ance.

More home-buy­ing tips can be found at www.Fred­dieMac.com.

STATEPOINT PHOTO

The prospect of mak­ing such a big in­vest­ment can be in­tim­i­dat­ing, es­pe­cially if you’re a first time home­buyer. Do your re­search, reach out to the pro­fes­sion­als, stick to your bud­get and be sure you’re ready to take on the fi­nan­cial re­spon­si­bil­i­ties of...

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