Purchasing your first home could be another way to build your wealth. But lack of knowledge about the process may stop some from achieving their homeownership dreams. But if you’re ready to put down roots, these eight tips may be able to help you prepare, and prosper now and into the future.
1. Consider your personal situation
Make sure you’re ready to take on the financial responsibilities of managing a mortgage, insurance, property taxes, utilities, and ongoing home maintenance before you buy.
2. Buy only what you can manage
A prequalification from a home mortgage consultant will help you understand your price range so you don’t fall for a house outside of your price range.
3. Don’t skip the inspection
Home inspections often identify problems related to the age and construction of the home including a sinking foundation, or simply a broken dishwasher.
4. Keep an eye on interest rates
When shopping for the best rates be sure to also compare the APR. The APR includes certain fees and represents the cost of the loan on an annual basis.
5. Prepare for down payment and closing costs
A down payment is required for most loan programs. However, a 20% down payment is not mandatory. In fact, qualified homebuyers may be able to put down as little as 3%. You should also prepare to cover closing costs, which could be another 3% to 5% of your loan amount.
6. Take advantage of programs
You may qualify for down payment assistance or even lower your mortgage costs by researching and applying for homeownership grants, loans, and tax credits.
7. Understand your borrowing choices
You have a lot of options when it comes to choosing your loan type so be sure to understand the difference between conventional and FHA (Federal Housing Administration) loans, and short and long term, fixed or adjustable rate loans.
8. Meet with a Home Mortgage Consultant
Get help demystifying the home buying process. A Wells Fargo Home Mortgage Consultant can help you find loans, terms and programs that may be right for you.
Through our Advancing HomeownershipSM effort, we hope to impact the declining homeownership rate among African Americans. We’ve committed to helping create more than 250,000 homeowners over the next 10 years by lending a projected $60 billion to African American homebuyers. Learn more at: wellsfargo.com/mortgage/jump/
And if you have more questions about homeownership, come in to talk to a home mortgage consultant today.
Get more tips to prosper when the Prepare to Prosper financial series returns with a focus on entrepreneurship.
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