Learning How to Buy a Home With an FHA Loan
For example, a borrower’s FICO scores can, and often do, affect the interest rates they are offered for a home loan or refinance loan. So it makes sense to start working on credit scores early by paying on time and lowering the amount of debt carried on credit cards.
But did you know that not all lenders will offer you the same interest rates? Shopping around for the right lender is just as important as working on your credit score.
And not just for one reason.
Shopping around can help first-time home buyers find a lender who might offer some kind of perk for being a new house hunter, it can also help you find a participating FHA lender who offers the right kind of loan for you.
Yes, you should also know there are a variety of FHA loan options for condo units, mobile homes, manufactured housing, town homes, etc. You have many housing types open to you, but you will need to make sure the participating lender offers the home loan you need first. Some FHA lenders don’t offer condo loans or mobile home loans depending on the demand in their market or other factors.
Learning how to buy a home also means doing something borrowers often are uncomfortable with; negotiating. You will negotiate the interest rates and other details with a lender, but you will also need to be prepared to haggle with the seller if you want to get the best deal possible.
Some buyers don’t realize that haggling can earn you seller contributions towards closing costs, a better price overall, or a resolution over things that may have been pointed out during the appraisal process that require repairs or corrections.
One of the most important things you can do as a new house hunter is to get pre-approved for a mortgage loan when you are ready to start house hunting. Not only does the seller take you more seriously, but you will also know the price ranges of homes you can afford. That is a very important detail.
Buying a home means asking a lot of questions and not just about the house itself. You will want to know what the local neighborhood is like, what conveniences are nearby, and how close the nearest sources of major noise are such as airports, highways, construction projects, etc.
Buying a home is a major investment and it pays to prepare early. Expect to make a down payment of at least 3.5% of the adjusted value of the home, save up for closing costs, and be ready for the lender to take a close look at your finances and work history.
Obama Mortgage Is the Home Affordable Program
Principal Payments and Your FHA Loan
Living in a Single Family Home
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