June is National Homeownership Month!
in Community News
Homeownership has long been the foundation of the American dream. With low rates, now is a great time to explore buying a home. Preparation is key to navigating today's market. In honor of June being National Homeownership Month, here are a few tips to help you prepare for buying a home. Contact your local Northwest Bank Mortgage Expert for your personal rate and monthly payment quote.
- Review your finances. A detailed analysis of your financial situation is central to the decision to buy. Calculate all of your monthly expenses, in addition to your potential mortgage payment, homeowner's insurance and taxes. Factor in other obligations such as car payments, credit card debt and living expenses. Budget for home maintenance costs as well. Aim to keep the mortgage payment and all other obligations below 40 percent of your monthly income, and stay within your budget when considering homes.
- Check your credit score. Your credit history is an important factor when applying for a loan. The score reflects how well you manage your debt and is calculated using data from your credit report. A lower credit score will result in a higher interest rate on your loan. If your score is too low, you may not be approved for a loan at that time. There are a number of steps you can take to improve your credit score, including paying your bills on time, only opening lines of credit you need and keeping your credit card balances below half of your available credit.
- Organize your finances. Getting a loan requires a few different documents including, but not limited to, pay stubs, tax returns and financial statements that are less than 60 days old. Provide copies of additional monthly payments, such as car loans, credit cards and student loans.
- Factor in closing costs. Once you have found a home within your budget and agreed on a purchase price, there will be costs associated with closing the sale. These costs can vary and will depend on the purchase price.