FDIC-Insured - Backed by the full faith and credit of the U.S. Government
Congratulations - your home loan application has been approved! These life-changing words are the hope of many would-be homebuyers. Qualifying for a home mortgage can seem like the biggest hurdle to homeownership. But a mortgage loan approval doesn't mean you can actually afford your dream home. When mortgage lenders approve an application, specific lifestyle expenses are not factored into the decision.
Historically low interest rates might help unlock the doors to your dream home sooner than expected. Low rates can increase your buying power in a competitive housing market. You might also be able to afford more home, with money left over to fund other financial goals. But accessing the best rates often requires excellent credit scores (740 and above).
After weeks of browsing house hunting websites, driving neighborhoods, and touring a few select open houses, you're ready to buy your dream home. Unless you plan on paying cash, you'll likely need a home loan. As long as you can find a mortgage with payments that don't exceed your monthly budget, any loan will do, right? Maybe not.
When funds are sparse, but creativity is abundant, tackling budget-friendly remodeling projects might be the answer. Simple, low-cost makeovers can add value to your home while showcasing your unique personality. There's no need to hire a team of experts. Focusing on small changes can keep costs down and result in the updated look you desire - no contractors, architects, or designers required.
Financial missteps of the past can rear their ugly heads at the worst possible times. As you navigate the mortgage process, expect a spotlight to shine on your credit score. This numerical representation of your credit history plays a significant role in loan approval. While the score needed to secure financing on your new home will largely depend on the loan type, e.g., Conventional, FHA, USDA, VA, etc., a record of late payments or high credit utilization can limit your financing options.
Rising property values and shrinking inventories make for a competitive housing market. You’ve probably witnessed homes that initially fell within your home buying budget succumb to a bidding war before vanishing from MLS listings, often within days. It can make you question whether homeownership is possible.
If you’re shopping for a new home, figuring out financing options is likely on your to-do list. The earlier you learn about your mortgage choices, the more time you have to prepare financially for closing. While this is good news, it doesn’t make reviewing home loan details feel less intimidating. A vast array of possibilities, lengthy explanations, and confusing terms can make it seem like you’ve enrolled in a college-level finance class against your will.
