Recommendations for Your Upcoming Home Purchase With Financing and Down Payment Requirements

Posted on: 10 June 2021

When you know you are ready to buy a home, you should start by looking at your financing, planning out your down payment finances, searching for the right home, and making plans for your move into the new home. Here are some recommendations for you to find success in this process as you plan out your financing and down payment requirements in your search for the right property for sale.

Check Out Financing

When you are planning to buy a house, you need to find out how much you can spend on the purchase before you begin searching. This will require you to go to a lender and apply for a mortgage loan to start the approval process. Once your lender reviews your credit and income, they can establish a loan pre-approval limit. They may also need other documentation, such as past tax returns, copies of your bank statements and paychecks, or extra details about your personal situation. 

Be sure you check out various types of loans and shop around for one with the best terms for your situation. You may find that a first-time home buyer mortgage provides you with low down payment requirements or a conventional loan with a low fixed interest rate. However, if your credit is not ideal, you can look into an adjustable-rate mortgage or one with variable terms to help you buy a home and work on improving your credit at the same time. 

Keep in mind the length of time you will stay in your home to determine the type of financing and the cost of the loan. For example, if you plan to move in a few years, you may want to seek out a low adjustable-rate mortgage that will increase in the next five to seven years. Because you will be selling the home and buying another, you won't experience paying the higher interest rate.

Look at Your Available Cash

Just as you want to get the right financing for your home purchase you will also need to calculate your cash needs for the home closing costs and down payment. A good measure to plan out what you will need to pay at closing is to talk to your real estate agent. They can help you estimate a good figure so you are prepared for the closing date.

You may need some funds for closing costs, which pay for your loan fees, title transfer, search fees, and title insurance. Closing costs also pay for prepaid mortgage interest and escrow fees along with a payment for the home inspection and appraisal for the mortgage lender. However, you can ask the seller to help you pay for these costs, so be sure to consult with your realtor about requesting this option.

For more information, contact a local real estate company near you, such as POW Realty Alaska.