Financing a Home

Getting a home loan is more difficult today than it's ever been, even for the most qualified buyers. Where, only a few years ago, loan applications could be approved in a matter of days, now the time to complete the loan application and underwriting process may take much longer than expected.

Approval always feels good. Most people don't think about financing until the time the purchase contract is being prepared, and wait until the offer has been accepted before applying for a mortgage. Today, you must start the loan approval process before you even look for your dream home. Pre-qualifying simply begins with speaking to a mortgage broker who-after asking you some questions about your finances will offer an opinion of the estimated loan amount you are eligible to borrow. The more supporting paperwork (income, assets, debts, etc.) you can provide will help confirm your eligibility for financing. There is usually no charge for pre-qualifying. Being pre-qualified makes you a stronger buyer in the marketplace.

Before you decide which mortgage is right for you, the first priority is to figure out exactly how much money you'll want to spend on your purchase. Keep in mind, there's more to home ownership than a monthly payment to repay the principal and interest.

Here are some other items you will need to consider when buying a home:

The cost of homeowners property taxes are usually 1.5 to 2 percent of the home's purchase price.
The cost of homeowner's insurance can still vary greatly depending on location. You may also need flood Insurance, even if you intend to live in a high rise condominium.
Private Mortgage Insurance (PMI) on conventional loans (or FHA Insurance) protects lenders against losses that result from defaults on home mortgages. Conventional and FHA insured loan requirements include mortgage insurance for borrowers making a down payment of less than 20%.

Before you decide on a lawyer, ask them to send you free written information about their qualifications and experience.