|
Six Money Tips for Buying a Home
Special to The Truth
When searching for a new
home, you may come across some conflicting information,
especially about home financing or mortgage loans. Consider
these six money tips to help you navigate the process.
• Know your credit
profile: Your credit score may impact the interest rate or
the amount of money you can borrow. Once a year, you may
obtain a free copy of your credit report from each of the
three credit bureaus at annualcreditreport.com, the official
site for free annual reports.
Having great credit is
certainly helpful, but not required. Homebuyer education and
home loan financing programs are making it easier for
homebuyers with a range of credit scores or limited credit
history to obtain a loan. Find more tips and free education
resources at wellsfargo.com/financial-education.
• Manage debt: Another
important factor mortgage lenders evaluate is debt-to-income
ratio. A good rule of thumb is to keep your total debt level
(taking into account the potential new mortgage payment) at
or below 36 percent of your gross monthly income. Use an
online debt-to-income calculator, like the one found at
wellsfargo.com/goals-credit/debt-to-income-calculator.
• Show them the money: A
Wells Fargo survey found that more than a third of people
believe you need 20 percent of the home purchase price to
make a down payment. The reality is, some home financing or
mortgage programs allow qualified homebuyers to put down as
little as 3 percent. And for those who qualify for special
mortgage programs – like military veterans or those
purchasing rural properties, a down payment may not be
required at all. You may also be allowed to use monetary
gifts from family or friends for all or part of the down
payment. In addition, certain community programs offer down
payment assistance, like the Wells Fargo NeighborhoodLIFT
program.
Keep in mind, some low
down payment programs may require private mortgage
insurance, which adds to the monthly payment and overall
loan cost. You’ll need to add that into your debt-to-income
consideration.
• Demonstrate proof of
income: Home mortgage financing programs are available for a
range of incomes. The key is demonstrating your ability to
repay the loan. Lenders will review your income history and
require current W2s, tax returns or similar documentation.
• Have a rainy-day fund:
Lenders want to see that you have savings or a cushion to
handle unexpected expenses that come with homeownership,
such as a leaky roof or failing appliance.
• Get pre-approved:
Getting pre-approved is a good way to understand what kind
of home loan product or program you may qualify for. Digital
services are streamlining the process considerably. For
example, Wells Fargo Home Lending’s online mortgage
application prefills contact and financial information for
existing customers. With a few clicks, any user can upload
income, payroll and tax information.
“Our intuitive,
mobile-ready technology offers homebuyers choices in how
they engage in the mortgage application process. Consumers
have the option to complete an application online, and still
have the opportunity to speak with a home mortgage
consultant if they have questions. In many cases, house
hunters can actually be pre-approved immediately,” says Liz
Bryant, national sales manager for Wells Fargo Home
Mortgage. “Digital services give prospective homebuyers the
ability to navigate their mortgage application where and
when they choose - relieving some of the pressure of making
timely decisions.”
If you’re interested in
starting an application for a home mortgage or refinancing
an existing property, visit wellsfargo.com/mortgage.
For a smooth home-buying
experience, it’s important to know your options, use
programs designed to help you, and access services that
streamline decision-making.
Courtesy StatePoint
|
