Millions of Americans purchase a new home every year. Some are first-time home buyers, and others are repeat home buyers. The truth is that no matter if this is your first time or 20th time to buy a home, you can benefit from some home buying tips.
These simple steps will help anyone to have a happy and fulfilling experience while buying a home.
- 1. Use a mortgage calculator or the mortgage formula to estimate your monthly mortgage payment.
- 2. Choose one of the top real estate agencies to help you. Then make sure you meet and greet realtors to pick the best realtor for you.
- 3. Find the house of your dreams within your budget.
So the steps are simple and straight forward. Let us examine each step a little closer to show how you can use them in the purchase of your new home.
Calculating Your New Mortgage Payment
Most times, a monthly mortgage payment is much cheaper than rent. Not only is it cheaper month to month, but when you sell your house you can end up with a check for the equity you have built up in your home.
To calculate your new monthly mortgage payment, you need the following information:
- Price of the Home- The dollar amount you want to spend.
- Down payment- if you put 20% down you do not have the added expense of mortgage insurance
- Mortgage Amount- Take the Price of the Home and Subtract the downpayment, and that will give you the mortgage amount.
- Mortgage Term- how many years it will take you to pay off the home. Usually, 15 years to 30 years is standard.
- Interest Rate- Go online and check banks mortgage interest rates in your area.
- Mortgage start date- estimate when you will start the mortgage.
Once you have gathered that information, you are ready to calculate your monthly mortgage payment. You can use the mortgage calculation formula from the free online mortgage calculator to do the rest of the work in calculating your mortgage payment. In just a few seconds, the free calculator will display your mortgage payment amount.
What About the Down Payment?
In the mortgage payment calculation, there was an entry for the down payment amount. What if you do not have a down payment of 10-20%, can you still get a mortgage? The short answer is, yes it is possible to get a mortgage with no down payment.
The government and some banking institutions have incentive programs to help people buy homes, especially for first-time home buyers. Some of the programs offer down payment assistance, where you pay the money back a little per month. Then other down payment assistance programs you do not have to pay the money back at all as long as you keep the home for a certain amount of years.
Some government programs allow you to buy a home for zero down if the house is located in a more rural area. There are several different types of government programs out there to help home buyers. Please understand that the government does not loan you the money themselves. You will need to find a bank that will lend you the money, and the government guarantees the bank to repay the funds you are borrowing if you were to default on your mortgage payment.
Additionally, some of the down payment assistance programs increase the amount you pay per month. This will be the case if you have to pay part or all of the down payment assistance money back. Usually, the interest rate is much lower on a downpayment assistance loan, so that helps out the per month amount to be less.
What About the Interest Rate?
The interest rate plays a big roll in how much you will be paying for your mortgage payment per month. There are quite a few factors that have an impact on what the interest rate will be for your new mortgage payment.
Let us go through a few on the factors.
- Credit Score- The higher your score, the better your rate.
- Location of House- Interest rates vary from state to state and city to city.
- Price of the house and the loan amount- You want to try to choose a loan amount in the middle of the housing market for a better rate.
- Downpayment- The more you put down, the better your rate will be.
- Term of the Loan- The shorter the term of the loan, the lower the interest rate.
- Type of Interest Rate- You can choose from a fixed rate or a variable interest rate. These can affect your overall interest rate for the term of the loan.
- Type of Loan-- The type of loan you choose can have a definite impact on the interest rate you receive.
Now you are equipped to find a great interest rate for your new home mortgage and pay a lower payment per month. It is time to get help to find a house.
Tips for Choosing a Top Performing Realtor
Your choice of a realtor is crucial to your new home purchase. Realtors are trained professionals that specialize in selling homes and making sure their clients are getting the best deal possible. In all honesty, some are better at making deals than others.
Here are some ways to make sure you get an expert realtor; these are some things to look for:
Choose a realtor from a real estate company with a good reputation in the area. Keep in mind that the biggest is not always the best. You want a quality real estate company that the community speaks about highly.
Find a realtor that is flexible and can work with your schedule.
Make sure your realtor provides you with listings from the MLS of housing in your price range in the area you are want to live. You can look at the listings before you go driving around town. This way, you will only see the homes you are genuinely interested in purchasing.
Realtors are a good source of knowledge when it comes to mortgages and banking. Many times they can recommend a bank or mortgage lending company if you are not already working with a particular banker.
So now you are ready to choose a realtor, and you are prequalified for your mortgage. You know what your mortgage payment will be. Now it is time to find your dream home that fits your budget. Happy house hunting!