Top Tips to Know When Buying a Home

By Nick Wilkins, Vice President (NMLS #584 949)

Whether you’re a first-time home buyer or a current homeowner interested in a change of address, these tips can help you stay on track to your goal.

  • Get pre-qualified before you look

As soon as you start thinking of looking for a home is the time to get pre-qualified for your loan. The appointment with your lender only takes about an hour, and this step can uncover issues or mistakes with your credit rating that you may not even be aware of — so you can get them fixed before you start house shopping.

  • Your credit rating affects your mortgage rate

To secure the best possible loan rate, you’ll need a credit score of 740 or higher. That doesn’t mean you can’t qualify for a loan with a lower score; you just won’t get the best rate.

  • Know what determines your loan terms

In deciding how much money to lend you, and what the terms of that loan will include, banks or lenders consider your credit rating, your down payment and your income-to-debt ratio.

  • Understand what you can afford

Based on your earnings, monthly expenses and other debt, you’ll be pre-qualified for a particular amount for your monthly mortgage payment. That payment must also include the monthly amounts for your annual real estate taxes and for your annual homeowner insurance premium.

  • Calculate your payment

We will work with you to determine the loan term that reflects your pre-qualified monthly mortgage payment. This allows you to know the home price range you can afford.

  • Don’t forget other purchase-related costs

On average, closing costs for your mortgage can range from $1,500-$2,000. You should also budget for one-time expenses, such as a home inspection fee and costs to hire a moving company.

  • Have a home emergency savings account

Because it’s inevitable that unplanned expenses arise when you own a house, set aside money for house emergencies such as a broken furnace, a leaking roof or the need for a new refrigerator.

Seem overwhelming? Let me help with financing your home. Call me at 351-7630 or email nwilkins@bankchampaign.com to set up your loan pre-qualification appointment.