| If you are going to buy a home, one of the first | | | | payments with a 5 year fixed rate plan. Also consider |
| things to do is find out what price range you can | | | | financing your home with zero points. |
| afford. Getting pre-approved for mortgage can | | | | 5. What debts are counted in your debt ratio? |
| determine the maximum home price and the loan | | | | Monthly debt payments are added to a mortgage to |
| amount you can get, based on your credit scores, | | | | calculate a back-end debt ratio, including: credit card |
| income, and down payment. A mortgage | | | | minimum payments, car loans, student loan, personal |
| pre-approval can save time and effort in your home | | | | loan, alimony, child support, tax liens. |
| search, and tells others that you are ready and able | | | | 6. Are you required to have an impound account? |
| to buy a home. | | | | An impound account is money collected with the |
| Here’s a List of 9 Other Mortgage Tips: | | | | monthly loan payment to be set aside in reserve to |
| 1. Need flexibility on credit issues? | | | | pay property taxes and insurance. It’s usually |
| In addition to a low down payment, an FHA | | | | required on mortgages with less than 20% down |
| mortgage allows lower credit scores than | | | | payment. |
| conventional home financing. A bankruptcy only needs | | | | 7. Buying a condo with an FHA mortgage? |
| to be discharged for two years, and three years on | | | | A condominium project must be FHA approved in |
| a foreclosure. | | | | order to get an FHA loan. If the project is not |
| 2. Need payment choices for a tight budget? | | | | approved, the FHA spot loan program is designed to |
| Some lenders offers flexible mortgage terms with a | | | | provide financing for an individual unit. |
| 30 year fixed rate that gives you a payment choice | | | | 8. What about opening new credit accounts? |
| each month for interest only or a fully amortized | | | | Applying for a new credit card, or financing the |
| payment, which could help when money is tight. | | | | purchase of anything, just before or during the |
| 3. Do you want an option for lower closing costs? | | | | mortgage process can drop your credit scores, and |
| If you need to reduce your closing costs, you | | | | lower credit scores can cause a higher rate or worse. |
| typically have the choice of decreasing the points by | | | | 9. Are you planning a job or career change? |
| increasing the rate. Mortgage rates are priced to | | | | If you plan to make a job change, especially if the |
| allow you to buy the interest rate up or down. | | | | change involves commission or a different line of |
| 4. How long will you keep your mortgage? | | | | work, wait until after your new mortgage has |
| If you plan to keep your mortgage for less than five | | | | funded, to avoid creating a potential problem. |
| years, you may be able to save money on your | | | | |