Thinking about starting the home buying process? Becoming a homeowner comes with a lot of crossing of “T’s” and dotting of “I’s”. But, when you know what you need to learn about, and have an excellent Realtor to assist with your real estate questions, the home buying process could not be easier! So, do NOT let your anxiety for the unknown deter you from becoming a homeowner. YOU have US and we’ve got your back!
Today we will walk you through the key factors that you should learn about before you start the home buying process. And, as always, Noonan Lombardi Realtors are your Southern New England Realtors for life, here for every step of your real estate experience. Let’s get started!
Home Buying Means You Need to Find a Mortgage Lender You Can Trust.
A Mortgage Lender is one of the most important people you will work with throughout the homebuying process. Your lender will be available to assist you in getting a home buyer preapproval for a mortgage loan, as well as to help you understand the total costs of buying a home. Be sure to learn about mortgage points and what they mean. Mortgage points are fees paid directly to the mortgage lender at the home closing in exchange for a reduced mortgage interest rate.
Remember About the Down Payment.
Nowadays, a twenty percent down payment is not always required when purchasing a home. If you do have a savings, the more you add to your down payment, the lower your mortgage will be in the long run. A 20 percent down payment is a good number to aim for to limit the costs of your loan. As a first-time-home-buyer, there are also a variety of down payment assistance programs available when a 20 percent down payment is not an option. When you have less than a 20 percent down payment, many mortgage loans will require the home buyer to pay Private Mortgage Insurance, or PMI.
According to bankrate.com, “Private mortgage insurance or PMI is a type of insurance that conventional mortgage lenders require when homebuyers put down less than 20 percent of the home’s purchase price. Borrowers with PMI pay a mortgage insurance premium, and costs vary by lender.”
A Home Buyer Savings Plan.
It is a great idea to create this after you have determined how much you need to put down on a home. Financial institutions, such as banks or credit unions, will require a history of stable funds in your account before you can apply for a loan. Having the added benefit of a cash reserve, or savings, after accounting for the down payment, is another great sign of your readiness for homeownership. This also allows financial institutions to see you as less of a financial risk for a mortgage.
A Good Home Buying Experience Starts By Knowing What You Can Afford.
According to the Consumer Finance Protection Bureau (CFPB), there are newly established lending rules that include a cap of a 43 percent debt-to-income ratio to qualify for a conventional home buyer mortgage. Both real estate and financial professionals suggest spending approximately 28 to 33 percent of your net income on housing.
Meet Noonan Lombardi Realtors
Noonan Lombardi Realtors operates one of the most successful real estate teams for home sales, property management and rentals in Rhode Island, Connecticut, and Massachusetts. This team uses top-of-line resources to make all your property dreams come true. The Noonan Lombardi Realtors team of professional and experienced realtors are transforming the way consumers make home-related decisions and connect with professionals. Based on this team’s wealth of experience in the real estate markets across Rhode Island, Massachusetts and Connecticut, you will be pleasantly pleased with the real estate services this team provides.