Comprehensive Lending Guide Bookmark Site
First tip, start saving your money for the down payment and closing costs. You will need at least 5% of the home purchase price for your down payment, and another 5-6% of the home purchase price for closing costs. Set up a spending plan where you can set aside savings: Link to our Budget Planning Module We have more information on costs: view the costs of a mortgage
Note that the IRS allows first-time home buyers to use retirement savings for purchasing their first home: If you qualify, additional sources of money for purchasing a home can come from:
Depending on your financial status, you may qualify for mortgage loan products that require little or no down payment: Review mortgage product: zero-down mortgages Review mortgage product: government loans
Depending on the market, you might be able to afford a home mortgage if interest rates are low and dropping. Keep your eye on the movement of interest rates and be ready to start the process your application if interest rates meet financial hurdles.
View how best to negotiate your mortgage rates: click for mortgage interest rates This will be a good time to run some numbers to see how much you can afford: click here for mortgage calculators
Make sure that you have a clean credit report prior to submitting your mortgage application. It will prevent delays and non-approvals: We have some valuable quick notes for review: what's in your credit report checking your credit report repairing your credit report Review mortgage loan products for individuals with less-than-good credit: click here for a-minus mortgage loans
Lenders require mortgage applicants to be within certain "housing" and "debt-to-income" ratios.
Run your numbers: link to calculate your ratios
Some lenders will increase both the housing ratio and debt-to-income ratio for qualified applicants: view getting qualified for a mortgage loan
If you have too much debt —
Use the calculator below to estimate how much home you can afford. Note that this calculation does not take in the cost of your escrow payment. See Understanding the True Cost of a Mortgage
* Calculations are based upon the assumptions you entered. Please note that rounding errors can make a small difference in calculations. The circumstances surrounding your credit and loan qualifications may result in different calculations.
Before you submit your mortgage application, review these steps about the mortgage lending process.
It will give you understanding how the process works so that you can negotiate the best terms for your financial needs: click here for our quick review: 10-step mortgage lending process
After you close on your mortgage, budget the money you need to: