Buying a Home; How Much Money Do I Need?
So, aside from watching the prices of homes climb and wondering how long interest rates will stay low, you're looking at homes for sale in your area and probably have used a mortgage calculator similar to ours to gain an idea of what you can comfortably afford. You've wondered about fixed rate and ARM's, and what happens if interest goes and pay goes down (I'd stick with fixed right now if it was me.).
Great time to buy, but discover all the costs now.
You need to dig a little deeper if that's all you've considered. Obviously there's the down payment, which can really vary from the low FHA loans of 3.5% or perhaps VA and USDA to conventional loans with 10-20% down or more. There's also what different lenders charge for different loan products.
It's still an awesome time buy a home per my friend Forrest Ferris at Horizon Home Loans down in Cincinnati, and untold numbers of Realtors and loan officers will tell you that. Not just because it's our profession but I bet many of you recall rates ranging from 10-15% a while back and the economic flux we see has that potential again. Interest rates will always rise and fall, but think of your age and where you want to be. Do you really want to wait and pay thousands more down the road for higher interest ... time is one of those costs.
Other things that you'll need to consider are the lenders different closing costs, possible homeowners' association fees, regular maintenance, property tax, any remodeling or renovations that you had in mind. Notice that all these things will vary from lender to lender, and from house to house?
And while you're weighing the costs, be advised just simply running numbers on a mortgage calculator will not tell you if you're ready to buy or not. Credit can cost you more than you think and many that think they have outstanding credit aren't aware of errors that are costing them points, so double check and get that cleaned up for sure. There's also job security and savings that you'll want to place in your decision making scales.
Take it to the Bank? Uh, NO!
First, work with a professional buyers' agent, a Realtor who (if they are worth their salt) have a small army of good lenders in their back pockets. Realtors rely on lenders to get clients approved and know which ones are suitable for a buyer's situation. Many buyers for instance, mistakenly believe they can get better rates by going to their bank, .... uh, no. Mortgage brokerages offer much better financial products than that. Even knowing that, it still pays to do some comparison shopping. If you're buying in SW Ohio, ask me. I help my clients buy and sell dozens of homes every year; I'm happy to make some recommendations.