Buying a Home in 2014

Set a Budget and Start your Housing Fund– What can you realistically afford to pay toward a mortgage each month? Write down your monthly expenses – car payment, credit card bills, groceries, entertainment – everything. Total the amount up and you have your non-housing expenses. Subtract your non-housing expenses from your take-home pay. Be sure to include an amount that gives you some breathing room for financial emergencies – flat tire, medical need, change in prices. THEN: what is left?
 
It is important to know what you can afford before you visit a lender. Remember, also, that there are closing costs that can range from $5,000-10,000 or more, depending on the house.
 
Check Your Credit Report and Score – We have mentioned this many times in Money Tip$. Your credit report needs to be accurate before you visit with a lender.Your credit score will help determine the APR for your mortgage.Use www.annualcreditreport.comto check your reports.
 
Choose the Best Type of Loan – Do you want a fixed or adjustable loan?How long do you need to take out the loan?Is it a conventional or government-backed mortgage? How long will you stay in the home will be a factor too. If you qualify for a government-backed loan, you will have the option of making a smaller down payment. Be sure you clearly understand the terms of any loan before signing on the dotted line.
 
Get Pre-Approved by a Mortgage Lender –Being pre-approved before looking at homes tells the realtor that you are serious and gives you some leverage for a loan. Pre-approved means that the lender is willing to give you a loan. Knowing what you can borrow means you can start shopping for homes in your price range.
 
After being pre-approved for a loan...
Seek out a Real Estate Agent.There are several ways to find a local real estate agent, including recommendations from people you trust.If time allows, it is wise to interview more than one agent to make sure they are listening to you.Interview them regarding the types of homes you are interested in purchasing, neighborhoods, and price range.Also make known your needs: – how many bathrooms, bedrooms, garage, basement, and backyard, etc.
 
More tips next month!
 
 
 
 
 
Courtesy of MoneyTip$, an Iowa State University Extension and Outreach blog.

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