REALIZE THE HOME BUYING PROCESS 


When you're buying your first home, you are going through such an exciting and stressful time. Buying a home is a huge commitment, and you constantly worry that you might be making a mistake. Though you've undoubtedly done your fair share of research, there are still a few things that you might not know about the home buying process.

You Don't Always Need 20% Down
Saving up 20 percent for the down payment is the gold standard, and most people have come across this advice.  Unfortunately, it's a big hurdle for many people. If it's hard for you to save up that much money, but you still think that you could afford a home, talk to a lender about your options. Some loans only require 3 percent down payment, and there may be ways that you can get some grant money to help with the down payment, depending on your income. The "catch" is that you'll have to pay an extra fee each month for private mortgage insurance (PMI). For many people who have been struggling to save up a down payment, this is a small price to pay.

It's Not Just a Mortgage Payment
One big mistake that first time home buyers make when they're looking for their dream home is using a mortgage calculator that doesn't include property taxes and insurance. When you make your monthly payment to your mortgage lender, that payment should include a portion of your annual homeowners insurance payment and a portion of your taxes in addition to the mortgage payment. The lender will put this money in an escrow account and use it to pay those bills when they become due. Depending on the property tax rates in your area and the types of homes you're looking at, this could add hundreds of dollars to your monthly payment. If your mortgage calculator doesn't include those fees, you are probably looking at houses that are out of your reach.

Your Monthly Payment Might Go Up -- Or Down
You've probably heard that it's best to get a fixed rate loan because your payments will remain constant throughout the duration of the loan. While this might be true about the mortgage portion of your monthly payment, it doesn't account for the insurance and tax portion of the payment. If there's a hike in the insurance costs due to a hurricane or the taxes in your area go up, so will your monthly payment. On the other hand, there's always a chance that those costs will go down as well. If this happens to you, the best thing to do is keep your payment the same and have that extra money go toward the principal payment.

There's Always Another Home
Buying a home can feel like a competition. When you find a house you like, you want to "win" it. Unfortunately, there's always the chance that someone else will come in with a better offer or that you and the owner can't agree on the terms. It's natural to feel some disappointment in this loss, but there is always another house that will come along. Most people who have lost out on their "first choice" home will be able to tell you all the reasons why the house they ended up buying was so much better than the one they first wanted.

Having a knowledgeable lender by your side throughout the home buying process is a big relief. 

For more information or questions about mortgage loans, 

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