Purchasing a Home? Plan ahead – Here’s How!

Does purchasing a home feel like an unattainable goal? Would you like to own a home, but don’t feel ready to take that step? Home ownership can be much closer than you’ve imagined if you start planning ahead now and consider the following factors:

• You don’t need as much of a down payment as you may think

If you’re a first-time homebuyer, you probably grew up with parents or grandparents who taught you to plan for a significant down payment requiring years of savings to buy a home. However, many first-time home buyers now purchase homes utilizing nationwide loan programs requiring very little down payment making homeownership more attainable eliminating years of savings.

• You will need to save for more than just the down payment

If you only plan for the low down payment, you will be surprised at the worst possible time – when you’ve already started the process of buying the home you want. You need to plan to also have money to pay for items like the loan’s origination charges, initial taxes, and homeowner’s insurance at closing. A good rule of thumb is to obtain a Loan Estimate (LE) from Royal United Mortgage for estimates on the taxes, insurance, and origination costs of the loan.

• You don’t have to come up with all of the money on your own

You may use funds from an immediate family member so long as the money is given to you as a gift and not a loan. Talk to your Loan Advisor before moving money to ensure it is documented correctly.

• You must begin documenting all aspects of your finances

When qualifying for a loan, your bank statements, tax returns, rental history, and income will all be considered. You need to verify that the documentation for these factors matches reality.

• Any large deposits going into your bank account in the months leading up to closing must come from a verifiable source; cash is nearly impossible to source. Make sure you’re saving your money in the bank as you go along.
• You need to document and claim the money you’re making (including tips and self-employment income) in order to use it for qualification.
• If you rent, you will need to document and prove a year’s worth of timely rental history via canceled checks or your rental company.

• Chose a qualified Loan Advisor

Choosing a Loan Advisor can make or break your purchase. You need to find an advisor who is experienced and who you trust to give you accurate numbers upfront. A Loan Advisor who knows what to expect and communicates that clearly and consistently with you makes the loan process go as smoothly and quickly as possible, ensuring you get the home you want. You can read reviews of your mortgage company on Lending Tree or the Better Business Bureau (BBB) website to help you make an informed decision.