With housing prices and mortgage interest rates at record lows, now is a good time to explore buying a home. “Buying a home is the single largest investment that most people will make in their lifetime,” said Ed Savino, VP Residential Loan Manager. “So it is important to make sure you are fully prepared.” Here are a few tips to help:
- Review your finances. Calculate all of your monthly expenses, in addition to your potential mortgage payment, homeowner’s insurance, taxes and condo fees. Include other obligations like car payments, credit card debt and living expenses. Budget for home maintenance costs, also. Keep the mortgage payment and all other obligations below 40 percent of your monthly income and stay within your budget.
- Check your credit score. Most lenders rely on the Fair Isaac Corporation (FICO) credit score when reviewing your loan application. The score reflects how well you manage your debt and is calculated using data from your credit report. A lower credit score could result in a higher interest rate on your loan. If your score is too low, you may not be approved for a loan at that time. You can improve your credit score by paying your bills on time and keeping your credit card balances below half of your available credit. To learn more, visit www.myfico.com.
- Organize your finances before you go to the bank. A variety of documents will be needed including, but not limited to, pay stubs, tax returns and bank statements that are less than 60 days old. Provide copies of credit cards, car payments and student loan payments. Bring any additional information you think will help evaluate your financial situation.
- Factor in closing costs. Once you have found a home, there will be costs associated with closing the sale. These will vary and depend on the purchase price and whether a real estate attorney or title/escrow company will be involved. By law, lenders are required to give you a written estimate of closing costs within three days of accepting your loan application.
For more information, visit www.crestsavings.bank or call our Residential Lenders at (609) 522-5011.
