Cash Management
Cash Management (Soft Token Required) ACH Originators and Merchant Capture Deposits
Cash Management (Soft Token Required) ACH Originators and Merchant Capture Deposits
Cash Management (Soft Token Required) ACH Originators and Merchant Capture Deposits
January 5, 2020
Buying a home can be equally exciting and nerve-wracking—especially for first-time homebuyers. To help you feel confident and navigate the process, we’ve put together six tips to help you prepare.
Keep your other short- or long-term financial goals in mind as you consider location, size, and amenities. How long do you plan to stay in the home? Will you be growing your family? As you review your priorities, make a list of must-haves, deal breakers, and nice-to-have features.
Take a look at your income and expenses and determine how much you can put toward your house each month, including mortgage, ongoing maintenance, utilities, property taxes, and homeowners insurance. You should also consider what down payment you can afford. While it’s common to put down 20%, many lenders permit much less and some first-time homebuyer programs allow as little as 3% down. However, a down payment of less than 20% might mean higher costs and paying for mortgage insurance.
A strong credit history can help you get the best possible rate when qualifying for a home loan. Review your credit report for errors and correct them right away. Look for opportunities to improve your credit by reducing outstanding debts, etc. It is also recommended that you pause any new credit actions like opening credit card accounts, buying a car, or other large purchases on credit until you sign your new home loan.
A preapproval letter gives you an estimate of how much a lender may be willing to lend based on your finances. Making you look like a much more serious buyer, a preapproval letter can also give you the edge over other buyers in negotiating with a seller.
There many different types of home loans, each with its own combination of pros and cons. You may be eligible for an assistance loan program. FHA loans give first-time homebuyers some flexibility with down payments as low as 3.5% while some VA loans require no down payment at all. A 30-year fixed mortgage typically offers the smallest monthly payment, while 20- or 15-year fixed mortgages sometimes offer a lower interest rate. Use a mortgage calculator or work with your lender to figure out what type of mortgage is the best fit for you.
With so much to think about, it’s not surprising that some things fall through the cracks. In addition to saving for a down payment, you’ll need to budget for the closing costs which can be between 2% and 5% of your loan amount. You can shop around to find the best rates and also negotiate with the home seller to cover a portion of your closing costs. After closing be sure to budge for moving expenses, any relevant homeowners association fees, homeowners insurance, and any paint, fixtures, or other upgrades you plan to make to your new home.
Buying a home is a major investment, both financially and emotionally. By doing your homework and being prepared, you’ll be in a better position to move into the home of your dreams and a price you can afford. Fortunately, you don’t have to do it alone, we’re here to help.
