The upheaval of a move affects every aspect of life—your family, home, career, social environment, personal property and even your finances. To help you make a smooth financial transition, KNOWAtlanta has put together some sound advice on moving your money and choosing the right mortgage.
Buying Your Dream Home
Whether you are looking for an upscale condo, suburban ranch or luxury estate, all homes have one thing in common—a mortgage. The right mortgage can save you thousands, and make the difference between financial freedom and decades of stress, so here are some simple steps for purchasing your dream home for the right price.
Find a Mortgage Agent
Before launching a search for your ideal home, meet with a mortgage agent to find out what you can afford. Besides being able to put you in touch with qualified real estate professionals, meeting with an agent can save you the heartbreak of falling in love with a house beyond your means. Do some research; ask friends for referrals and browse the Internet to find the agent or company that offers the greatest number of loan options of interest to you.
A Broker or Lender?
There are two types of mortgage professionals, lenders and brokers. Lenders have direct access to loans and can often waive fees associated with a loan, while brokers typically have multiple options for loans, but different lenders may charge a fee for a specific loan.
Get Pre-qualified
Pre-qualifying, in general terms, is a quick calculation using your income, assets, monthly debt and cash available, to determine your maximum affordable housing price. Pre-qualifying is usually free of charge and can be done in a few minutes over the phone, in person or online.
Realtors love potential buyers who take the time to get pre-qualified because it lets them know they have a general means of buying a home. Pre-qualification also saves them time because they know exactly what you can afford and can tailor the home search accordingly.
Get Pre-approved
Pre-approval means that a financial institution has committed to giving you a loan. The agent submits an application (underwritten after debt, credit and income verification) to the lender, who comes back with conditions in preparation for final approval. Once completed, the buyer has a greater assurance of approval once a home is located and appraised.
Purchasing Your Home
In today’s transient real estate market, the 20 percent down rule no longer applies. Although 5 to 10 percent is the norm today, buyers can secure FHA or VA loans for as little as 2 percent down. However, you don’t want to stretch beyond your means—your annual home loan should be no more than 30 percent of your gross income.
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