Home ownership is a core component in living the American Dream. For most people, acquiring their own home is their most important goal. Most people will have to finance their home ownership by obtaining a home mortgage from a lending institution. Here are 5 quick tips to achieve this goal:
1. FIND THE RIGHT HOME FOR YOU
How big is your family? What neighborhoods are you willing to consider? Are schools a factor? Is a single-family home a requirement or is a condo an option? Based on your income and assets, what kind of home can you afford? Make a list of the features you want in a home–number of bedrooms, a fenced yard, granite countertops, a garage, etc.–and then rank them in terms of priorities. Decide whether the house or the neighborhood matters more to you, or whether you’re willing to make a longer commute in order to own a home with a larger lot. These kinds of decisions need to be made before beginning the search for your new home.
2. SAVE FOR A DOWN PAYMENT
Nearly all mortgage loans and lenders require some amount of cash as a down payment. The amount you've set aside for this will determine the kind of mortgage you qualify for. It will also impact how much you can afford to borrow for a home.
3. CALCULATE WHAT YOU CAN AFFORD
Consider Your Income. Consider Your Debts. Consider The Down Payment
There are all kinds of online calculators that can help you determine what your down payment amount will be based on the type of loan, the price of your house, your location, and credit rating.
4. COMPARE MORTGAGE LENDERS
One of the number 1 mistakes made by home buyers is NOT shopping around for a mortgage! Once you set aside some time to make a few inquiries, tell the truth. Mortgage quotes can vary based on your down payment, credit history, income, assets, and debt. Fill out the form with honest information to get a reliable quote. They're going to verify this information anyway so putting in misinformation won't help you at all in the long term.
5. GET PRE-QUALIFIED
By this point, you should have a pretty good idea about what kind of home you’re looking for, and the neighborhood you’d like to live in. You also know how much you've saved for a down payment, which in turn will determine the type of loan you should pursue. If you've compared a few rates you should request a pre-qualification letter. Getting pre-qualified for a mortgage loan requires that you select a mortgage lender to work with and obtain your loan. Essentially, mortgage pre-qualification is a promise from the lender that you’re qualified to borrow up to a certain amount of money at a specific interest rate, subject to a property appraisal and other documentation.