Steps to Take Now to Afford Your First Home
If you are looking to buy a home, it can be easy to get caught up in the excitement of having a place to call your own. Whether you are buying for the first time, or just haven't bought a home recently, here are a few factors all buyers should consider:
Steps to Take...
Review Credit History & Score
Knowing your current credit score and where you stand is a big part of how a lender will evaluate you. You can start by getting a free consumer copy of your credit at www.annualcreditreport.com.
PS: Getting a copy of your credit profile, won't affect your score either.
Review the accuracy of the information in the report, and seek clarification of items you don't recognize. Be cautious about closing old accounts or opening new lines of credit. It may be best to consult a mortgage professional to make sure any changes you wish to make won't affect your credit score and your ability to buy a home.
Current Mortgage Rates
Tracking interest rates always works to your advantage. Just know that most advertised or published rates online, newsprint or shown on lender websites are what lenders would give to a"perfect borrower." Your rate can be higher or lower depending on many factors, such as: amount being borrowed, your credit score, your debt-to-income, your down payment, the loan term, just to name a few.
If you want to get pre-qualified, (we do it for free) give our office a call. We'll be glad to give you a better idea of what interest rate you qualify for based on your information.
Fees and Down Payment and Closing Costs
There are many other types of fees relating to buying a home. Some mortgage lenders, such as large banks, may charge a borrower an application fee. The borrower has to pay this fee even if they end up not qualifying for a loan with them! Although, we don't follow this practice- we do not charge our borrowers application fees. Mortgage lenders may also charge a percent of the loan amount called an "origination fee." This can add up to a large sum of money depending on your loan amount. Once again, we don't charge an origination fee percentage based on a loan amount. We believe in keeping homeownership affordable, so we charge one flat fee for processing and origination. This can save borrowers hundreds to several thousands of dollars, when comparing us to other lenders.
A borrower's down payment is another financial decision that a borrower must commit to. If you work with a mortgage professional early-on, they will be able to help guide you to the best program based on your financial goals. Whether it's a 0-percent VA loan, a state-sponsored down payment assistance grant program, a 3.5-percent loan with FHA, a 5-percent down conventional, or a standard 20-percent conventional loan- your mortgage professional can help you decide what is best for you based on your goals and time horizon.
Some mortgage programs require a borrower to pay several hundreds of dollars for a home appraisal in order for the lender to determine the value of the home. It's also wise for borrowers to pay a separate fee for a home inspection to make sure there are no hidden problems with the roof, foundation, plumbing or electrical.
There may be other fees, such as attorney fees, title and escrow fees, and transfer tax fees (depending on where you live). Your mortgage professional will provide you with a Loan Estimate fee sheet, so you can easily identify all the costs and fees relating to your mortgage.
Lifestyle and Affordability
Although owning a home comes with a strong sense of pride and community, homes can also cause a financial strain with the costs to maintain it. Appliances break, water heaters eventually leak, roofs may need to be repaired, yards need maintenance, etc. Be cautious and budget for these unexpected events!
One last word of wisdom: "Buy what you can afford today- not what you expect to make five years from now." We all hope our incomes will rise in the future, but also account for times of unexpected income loss, due from an illness or unplanned job loss.
The Takeaway
The home buying process is already complicated—make it easier on yourself by avoiding those frequent, but common mistakes.
The key to having a successful stress-free mortgage transaction is communication between your Realtor, Mortgage Professional, Third Parties involved, and from you, the Borrower(s).
By having clear lines of communication, most mortgage problems can be averted. Listen to what your mortgage professional recommends. If you have questions, ask before proceeding. If you are confused on what to do, wait until you can get clarification.
I'm very fortunate to have helped so many first-time homebuyers navigate today's complicated home buying process. I've also been able to help countless others who have been turned away when other banks or lenders said, "No."
I urge you to review our team's past client reviews and testimonials, and you'll see just how dedicated we are to helping our clients succeed with their new home purchase. At Sierra Pacific Mortgage, we look forward to helping you enjoy a stress-free home buying experience.
Take advantage of our Mortgage Pre-Qualification- it's a FREE service we provide to all our potential borrowers. Give me a call, I'm happy to help!
Franco Manueli
Branch Manager & Residential Mortgage Loan Originator
NMLS #332420
2580 St. Rose Pkwy., Suite #230
Henderson, NV 89074
Office: (702) 420-2250
Fax: (855) 689-6691
Some products and services may not be available in all states. Programs, rates, terms, and conditions are subject to change without notice. Subject to verification of borrower qualifications, property evaluations and credit approval. Terms and conditions apply. This is not a commitment to lend and not all borrowers will qualify. Sierra Pacific Mortgage Company, Inc. may not be the lender for all products offered. Some loans may be made by a lender with whom Sierra Pacific Mortgage has a business relationship. Sierra Pacific Mortgage Company, Inc. NMLS #1788. Nevada Commissioner of Mortgage License #3268. Additional license info available at: www.nmlsconsumeraccess.org. Click Here to view all disclosure information. Sierra Pacific Mortgage Company, Inc. is an Equal Housing Lender.
