When you plan to buy a home, getting your credit in order and determining your budget are all important financial steps to begin the home-buying process. But you also need to decide how much you need to begin the process and what types of financing are available to you. Here are two financial items you need to consider to help you as you prepare to buy a home.
Determine How Much Cash You Need Up-Front for the Home Purchase
When you are considering buying a home, you may need to have some funds available for the reason of securing and buying the home. In some situations, when you put an offer to buy a home, you can put some earnest money toward the purchase of the home. This earnest money shows your intent to buy the home and is usually non-refundable if you decide to back out of the contract later on. It also helps strengthen your offer to buy the home.
You may also need money to put toward the down payment for your home's financing at the escrow closing appointment to finalize the purchase of the property and transfer ownership to you from the seller. A down payment is traditionally 20 percent of the home purchase amount, but there are many types of home loans available where you can put smaller amounts as a down payment, including no-down-payment loans. Talk to your mortgage broker about the types of financing they have available and what you qualify for. Keep in mind, any funds you put as a down payment will lower the amount you need to borrow and as a result, will lower your mortgage payment over the terms of the loan.
Check Into Financing Options
Before you begin your search for a home, it is a good idea to decide how you plan to buy the home with the help of a home loan. Unless you have the cash to pay for the home, you will need to borrow the funds to pay to the home's seller.
Applying for financing through your bank or a mortgage broker is a good way to secure the funds. If your credit does not allow you to get bank financing, you can look for a home seller who will provide the financing. This allows you to transfer the home into your name and make monthly payments to the seller for a determined amount of time. This transaction should be secured with a mortgage note, which you and the seller sign and outline the terms of the loan.
For more information on finding waterfront homes, contact your local real estate agent.Share
3 May 2018
I have always been someone who is passionate about making the world around me more beautiful, which is probably why I was drawn to real estate initially. I really wanted to create a place where me and my family could spend a lot of time together in a peaceful, relaxing place, so I started looking for places in my area that were fit for the job. Within a few months, I was able to find an incredible property that was within my price range, so I purchased it as soon as possible. This blog is all about choosing beautiful real estate.