If you are tackling the home buying process for the first time, there are a few things you should know about financing your purchase before you start to look. Your mortgage professional can help.
This may sound obvious, but you don’t want to fall for something beyond your means. You’ll want to know what your credit looks like and what you can afford before you start looking.
You can get free credit reports, but your best bet is to have a licensed mortgage professional run it for you, as the information and scores he or she can pull are often different from the reports you may be able to obtain yourself. Plus, lenders will use only credit reports they pull themselves, so you will need to have them run the report eventually.
Pay Your Bills on Time
It’s amazing the number of buyers who don’t realize the importance of paying bills on time.
Lenders place a lot of importance on your ability to pay bills in a timely manner, especially over the past 12 to 24 months; this recent payment history is most likely to reflect your ability to make monthly mortgage payments.
Never Get Attached
Borrowers often fall in love with a property when they submit an offer, only to find it has been sold to another bidder. It’s usually not their fault; this happens. But especially in the current market, there are lots of homes available; take time with the process and find what’s right for you.
Buying a condo can be a great choice for many, as it offers lower-maintenance living and other advantages not available in a single-family home.
However, there are things that you will want to keep in mind when starting to look for a condominium. Not the least of them is to ensure you have a great team of experts behind you, including your mortgage professional, your real estate agent and your real estate attorney.
Condos differ from single-family homes in that maintenance for the entire development is managed by the association. This includes landscaping; painting; snow removal, if applicable; and often such items as roof replacement, if required. While this may result in a significant monthly fee, you are spared the burden of having to deal with these issues; this is very much worth the expense for many buyers, especially those who are less able to perform these tasks themselves.
If you are planning on financing a condominium through the FHA, the development needs to be included in the FHA Approved Condo Listings. This means that the FHA has examined the rules and regulations that govern the development and approved it as one that can be financed through the FHA. Your team can help you find whether the condo property you’re interested in has been approved by the FHA.
You and your attorney should look closely at the financial statements of the association. You need to find out if there are any financial or administrative challenges with this particular property that may result in either significantly higher dues at some point or even the folding of the association itself. This is rare, but it does happen. And you don’t want it to happen in your case; prevent this by being an informed consumer and listening to your team.
Discuss financing your condominium with your mortgage professional.