Save for a down payment
Most mortgage lenders require a cash down payment of 5% to 20% of the sale price. Buyers today may find it difficult to save for a large down payment. Traditionally, buyers who were unable to put 20% down had to pay an additional $100 to $200 per month to their mortgage lender for private mortgage insurance. The great news is, today many lenders are offering home affordability and down payment assistance programs.
Shop around
We know that the best mortgage experience for buyers occurs when they have open and ongoing communication with their lender. Finding a lender and discussing financial needs and budget should be the very first step a buyer takes in the home-buying process even before finding a Realtor. Saving for a down payment is an obstacle to homeownership for many first-time buyers. That’s why it’s important to find a lender that helps buyers understand what they can afford and share what financing options are available. Today, mortgages are not one size fits all. To find the option that best fits their needs, buyers should discuss their financial situation with a lender they trust.
Factor in home improvement costs
With today’s low inventory of affordable homes for first-time buyers, many buyers will find themselves settling on a home that requires renovations or upgrades. These costs should be factored in at the start of the financing process so buyers are comfortable with their down payment and monthly payment and will have money available to make improvements. For buyers who have not lived on their own or for those who previously rented, the added costs of running a household can be a shock. Monthly costs for utilities, homeowner’s association fees, cable, and Internet, can add up quickly. Factoring these expenses in at the beginning of the mortgage financing process can help borrowers better assess their overall budget and a realistic monthly mortgage payment.
So if you are buying a house and need so extra cash for improvements or you just want to do some decorating, consider getting a loan to help with that and you don’t have to worry about a credit check.