Purchasing a New Home

[ 0 ] April 27, 2015 |

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Homeownership may be one of the biggest financial decisions you will ever make, and for that reason you shouldn’t just “jump” into it.

Nick Brooks, Vice President of Lending, has some insight of what to do when looking to purchase.

Buying verses Renting – What are the differences?

When buying a home, you may choose a fixed interest rate; allowing your principal and interest payments to stay the same for the term of the loan. Homeownership also has the potential to build equity in your home as well as income tax benefits for interest paid on the mortgage.

Unlike a fixed interest rate on a mortgage, rent on a property may increase each year. When renting, landlords have to pay taxes and maintain the property, but get the opportunity to build equity and potential tax savings on the mortgage.

Credit – Why is that word so important?

A credit score affects not only what your loan to value requirement is, but also what the interest rate will be and the amount of your monthly payments.

Improving credit- Help boost that three digit number!

Pay all bills on time, keep balances on credit cards low, and don’t close unused accounts.

Down payment – What options do I have?

There are lots of available options, and it is best to start saving early. The recommended down-payment amount is 20% of the purchase price which will get you a loan with the best rate and terms.

Don’t forget to ask if you qualify for any grants.

Choosing a lender – How do I know which one is right for me? Bigger is not always better!

Choosing the right lender may be difficult. Talk to friends and family, get recommendations, and choose one that is known and trusted to do what is best for you.

Applying – What do I need?

Employment records, proof of income, and bank statements are just a few documents that will be needed before going forward. Prove that you have diligently saved, paid bills on time, and can afford your dream home.

Closing

On the day of the closing, the process will have lasted anywhere from 40 to 60 days. Contracts will be signed and ownership will be transferred to you. The last step is leaving with your keys to your new home in hand!

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Category: Money Tips

About the Author ()

Rachel has worked at IAACU since April 2013. She graduated from Illinois State University in 2013 with a degree in Agribusiness. Rachel previously worked at the First State Bank of Monticello and for the City of Monticello. Since November 2014 she has been a member of the social media team and participates in other marketing activities. Her daily activities include answering phone calls, solving home banking and Visa questions, as well as helping at the COUNTRY Agency Learning School. She loves staying busy, organized, and proactive!

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