Purchasing a home is one of the most important and rewarding decisions a person can make, which also means it is one of the most stressful! With all of the steps, money and people involved, it is easy to be overwhelmed.
Affordability:
Rule of thumb: You can afford a home that costs about 2 ½ times
your yearly income.
Some other factors that will help you determine how much you can afford:
How much money do you need for other bills?
Such as utilities, doctors, groceries, car payments, insurance. etc.
How much do you have for a down payment?
The typical minimum down payment is 3% of the total loan amount. Some special financing programs have lower down payment requirements. Down payments can be from funds given to you by family or friends.
How much will you need for closing costs and other payments?
Be prepared to get out you checkbook. There are several costs – along with the down payment – that will arise, such as earnest money, inspection and appraisal fees and insurance binders.
Qualification:
Do not confuse loan qualification with loan approval. Even before you begin looking for a home, meet with a lender to determine how much you qualify for. Keep in mind that pre-qualifying with a lender does not bind you to that lender. Do not sign any paperwork that would obligate you to a lender at this point.
Discrimination & Fair Lending:
It is against Federal and Minnesota Law for sellers, agents and lenders to discriminate against the buyer because of their race, color, creed, sex, religion, national origin, marital status, income assistance, disability, sexual orientation or familial status.
Contact one of our lender affiliations or one of your own choosing to assist you in obtaining the information you need to make a sound financial decision. You will need a letter of commitment, a construction or interim loan and an end mortgage approval. Ask your builder representative or your lender to explain anything you are not sure of. This is a major process in building your new home. Make sure you understand all the costs involved and are comfortable with your HUD 1 statement and the payment you will have to make.
