Mortgage Guru
10-23-2004, 06:16 AM
Mortgage Tips For a New Home Buyer
Having reached this point in the process, it is time to look at a few of the most important things to keep in mind when you are looking for that First mortgage. Below you will find a handy reference of quick reminders.
Don't over-borrow.
It's fine to want the best home you can afford, but be certain that it is comfortably affordable. Just because you qualify for a certain sum doesn't mean it will work well with your budget.
Get a budget and stick to it.
Review your budget and really keep to it. A working budget allows you to get the most home for your money without being "house poor."
Gather documentation.
You don't need to have all items on hand before you apply, but there are a number of documents you'll need eventually, so why not gather them now. Use our document checklist as a guideline.
Prepare for closing costs. In addition to your down payment, you need to reserve closing costs. Closing costs can include a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. Depending on the type of loan and your location, these can range from three to five percent of the mortgage amount, will be paid in certified funds at the closing and cannot be borrowed funds.
Compare lenders.
Fortunately you can do that in one place -- LendingTree. Just complete our qualification form and get up to four offers from lenders that compete for your business.
Consider points when comparing.
Your total mortgage cost will be determined by a number of factors including, for example: The interest rate, the term and the number of points. For a definition of other terms, see our Mortgage Glossary.
Consider a 15- or 20-year term. Many homebuyers make the assumption that a shorter term will boost their payments out of reach. Unless you make the comparison, you'll never know. If you don't want to commit to the higher payment of a shorter term, try this: mortgage the home with a 30-year loan but have the lender develop a 15- and a 30-year amortization sheet. Then, do your best to pay the mortgage at the shorter-term payment. It will do wonders for your equity position.
Having reached this point in the process, it is time to look at a few of the most important things to keep in mind when you are looking for that First mortgage. Below you will find a handy reference of quick reminders.
Don't over-borrow.
It's fine to want the best home you can afford, but be certain that it is comfortably affordable. Just because you qualify for a certain sum doesn't mean it will work well with your budget.
Get a budget and stick to it.
Review your budget and really keep to it. A working budget allows you to get the most home for your money without being "house poor."
Gather documentation.
You don't need to have all items on hand before you apply, but there are a number of documents you'll need eventually, so why not gather them now. Use our document checklist as a guideline.
Prepare for closing costs. In addition to your down payment, you need to reserve closing costs. Closing costs can include a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. Depending on the type of loan and your location, these can range from three to five percent of the mortgage amount, will be paid in certified funds at the closing and cannot be borrowed funds.
Compare lenders.
Fortunately you can do that in one place -- LendingTree. Just complete our qualification form and get up to four offers from lenders that compete for your business.
Consider points when comparing.
Your total mortgage cost will be determined by a number of factors including, for example: The interest rate, the term and the number of points. For a definition of other terms, see our Mortgage Glossary.
Consider a 15- or 20-year term. Many homebuyers make the assumption that a shorter term will boost their payments out of reach. Unless you make the comparison, you'll never know. If you don't want to commit to the higher payment of a shorter term, try this: mortgage the home with a 30-year loan but have the lender develop a 15- and a 30-year amortization sheet. Then, do your best to pay the mortgage at the shorter-term payment. It will do wonders for your equity position.