If you are ready to move to homeownership or purchase your next home soon, planning is the key to success. To help you prepare to buy a home with confidence, NEBAT’s Kimberly Klaetsch, AVP – Retail Lending Supervisor, has some tips to help you start the process.
Get Your Finances in Order
Your credit score, debt-to-income ratio, and the down payment you can afford are all taken into consideration to determine what loans and interest rates you qualify for. To keep your credit and debt-to-income ratio in a healthy spot, make payments on time and pay down your debt (for example, make more than the minimum payment on credit card bills).
In a perfect world, having a 20% down payment is ideal. Doing so will help you own the home quicker with fewer fees; however, NEBAT has options with as little as a 0% down payment. Current homeowners can also use their home equity towards the purchase of their next home. NEBAT has several different products to help you finance your future home.
Meet with your local lender to establish how much you can afford to spend on a house and see what your monthly payments will look like. Once you are ready, your lender can help you get pre-approved for a mortgage, or you can apply online! When you start house hunting, you can quickly obtain a pre-approval letter to accompany any offers.
Budget for Mortgage Closing Costs
When you prepare to buy a home, there are common charges to budget for, including mortgage closing costs. Fortunately, there are ways you can reduce these expenses. Before you apply for a mortgage, ask your lender if there are any application fees. NEBAT does not charge application fees, instead the focus is on building a relationship with the borrower. To reduce your interest rate and monthly payment, you may be able to purchase discount points at closing which is a one-time fee to “buy” a lower rate.
Private mortgage insurance (PMI) is another expenditure which can be reduced or eliminated. Having good credit can reduce how much PMI you are required to pay. Housing appreciation and having a 20% down payment are two ways to eliminate PMI entirely.
Prepare to Buy a Home with the Right Mortgage for You
Mortgage rates are expected to increase in 2022 but remain historically low, so it is a wonderful time to take advantage of the low rates. When it comes to home loans, there is not a one-size-fits-all option. Instead, lenders look at each situation on a case-by-case basis to find the best product for a borrower’s needs. NEBAT has several different loan programs they work with.
If you are a first-time home buyer or are worried about whether your income will meet qualifications, products such as Fannie Mae HomeReady, USDA and community grants can be suitable options When you meet with a lender, they can help find the best loan program to suit your individual needs.
NEBAT is here to support you throughout your home buying process. Our Home Mortgage page is a great place to start when getting ready to buy your first home.
Why Choose NEBAT?
National Exchange Bank & Trust is a local bank that has several different loan options and has Loan Representatives ready to help you find the best loan program to suit your individual needs. Since NEBAT services most of its own loans, you can go back to your local bank and lender for any questions that come up after the loan closes. We are honored to support you during this exciting time!