Financing Dos and Don’ts:
When you’re ready to start the financing phase of purchasing, it is important that you follow the tips below:
Do the following:
- Continue paying credit card debt and other bills.
- Get pre-qualified to learn how much you can afford.
- Save for your down payment and closing costs.
- Keep all accounts current, including mortgage, car loans, credit cards, etc.
- Contact both your lender and your sales associates anytime a question may arise.
- Make all payments on or before due dates on all accounts, even if the account is being paid off with your new loan.
- Have any lender-required money/funds to your loan office within 72 hours after home inspection is complete.
- Return phone calls from your agent, loan officer, settlement company, or anyone else involved in your transaction within 2 hours.
Do NOT do the following:
- Quit your job or change jobs. If this happens, contact your loan officer.
- Allow anyone to make an inquiry on your credit report except your lender.
- Charge abnormal amounts to your current credit cards or credit lines.
- Change bank accounts or transfer money within your existing accounts.
- Co-sign for anything.
- Purchase or attempt to purchase anything else on credit such as another car, truck, boat, furniture or other real estate.
- Apply for credit anywhere else except with your lender. This causes more hits on your credit rating which can reduce your credit score.
- Send in late payments or incur late fees for anything.
Know The Lingo
Purchasing a home can sometimes be intimidating, but with the right amount of knowledge and information on mortgages and financing the stress can be alleviated. Read through the chart below to learn some of the terminology that often stumps first time home buyers.
- FHA Loan: Federal Housing Administration mortgage insurance provided by an FHA-approved lender. FHA loans enable qualifying Americans to borrow money to purchase a home that they would not otherwise be able to afford.
- Fixed Mortgage: A mortgage where the interest rate remains the same for the length of the loan.
- Interest: Money paid regularly at a particular rate for the use of money lent.
- PITI: An abbreviation for principal, interest, taxes, and insurance. Typically, this is a monthly payment to a lender on a mortgage.
- Pre-Qualification: A process to determine how much home you can purchase, as well as what type of mortgage loan best suits your needs.¡
- Principle: The money used to pay down the balance of a loan.
- Mortgage Lender: A person who provides funds for a mortgage. They also manage the credit and financial information review, property, and loan application process through closing.