| To buy a house, you make a small down | | | | fees. Make sure that you discuss with your lender |
| payment (usually up to 20% of the value of the | | | | all the fees you should expect to pay, and ask |
| house), then you look for the rest of the money | | | | them to clarify if there are any costs that you do |
| from a lender (a mortgage). If you are not | | | | not understand; these could very well be junk |
| careful, you could end up making costly mistakes. | | | | fees that you do not want to have thrown on |
| There are some things that you could do before | | | | you! |
| even applying for a mortgage to ensure that the | | | | Closing costs can lower the amount of money |
| biggest debt of your life does not end up being | | | | you have at your disposal to make your down |
| the cause of your death. | | | | payment. Make sure that you therefore plan for |
| The first tip is to fix your credit, if necessary, | | | | the closing costs, which would usually be about 1 |
| before applying for a mortgage. Obtain copies of | | | | to 8% of the cost of the house. This way, you |
| your credit report from all three of the credit | | | | will not get shocked towards the end of the |
| reporting agencies (Experian, Equifax, and Trans | | | | house buying process, when you realize that you |
| Union) long before ever applying for a mortgage | | | | will not have any money left over in your savings |
| loan. By law, each CRA has to give you a free | | | | once you sign on the dotted line. |
| copy of your credit report once a year if you ask | | | | When establishing your budget, make sure that |
| for it. Look through your report and make sure | | | | you will have some money left over in your |
| that it does not have any erroneous entries. | | | | savings to handle aspects like moving house, basic |
| Sometimes similar names can get mixed up, such | | | | repairs, emergencies, and even your monthly |
| as John S. Smith's credit information getting put | | | | mortgage payments for at least three months |
| onto the credit report of his son, John S. Smith Jr. | | | | after finalizing your purchase. This will remarkably |
| Other times there is really no concrete | | | | reduce the amount of stress that you will face |
| explanation for an error; it just simply happens. | | | | after dealing with the closing costs. |
| You should also obtain your FICO score, which is | | | | Lenders will usually be willing to lend you up to |
| a three digit number that rates your credit | | | | 33% of your gross income towards your |
| worthiness and is used in more than 70% of | | | | mortgage. However, you need to remember that |
| mortgage-lending decisions. Obtaining your credit | | | | home ownership is expensive. As a home owner, |
| history and score at least six months before | | | | you have to make your mortgage payments |
| applying for a mortgage will give you enough time | | | | regularly, together with property taxes, home |
| to challenge any erroneous entries, and also to | | | | owners insurance, bills and utility payments, and |
| work on improving the legitimate entries. | | | | maintenance and repairs. Factor all these aspects |
| Once you've fixed your credit, you need to find | | | | into your budget when deciding on how much |
| out how much interest is being charged on | | | | mortgage to get, so that you don't overextend |
| mortgages for a people with similar credit ratings | | | | yourself. Also remember that you will still have to |
| to yours. usually publishes this kind of information | | | | deal with all your other obligations, as well as any |
| regularly. Armed with this knowledge, you'll be able | | | | emergencies that may come up. Don't allow the |
| to choose your mortgage lender wisely, so that | | | | mortgage companies to 'trick' you into accepting |
| you avoid being charged much more interest than | | | | more than you can deal with! |
| you should. | | | | Buying a house is more than making mortgage |
| When looking for your mortgage lender, look for | | | | payments; it means taking up additional expenses |
| first-time home buyers' programs, which normally | | | | that you would not have been bothered with as a |
| offer better interest rates. If you do not qualify | | | | renter. When planning to apply for a mortgage, |
| for these loans, you should make sure that the | | | | make sure that you have taken all the costs of |
| lender that you finally choose has a good | | | | owning a home into consideration, so that you can |
| reputation, is preferably an 'A' lender, and does | | | | get the most appropriate loan for you and your |
| not have any prepayment penalties or any junk | | | | family. |