First Time Homebuyers Questions Answered Part 2
September 2, 2008
Finding a Lender
Finding a lender may be the hardest or most confusing part of purchasing a home. The various establishments that offer home mortgage loans include banks, credit unions, savings and loan companies, private mortgage companies, and state government lenders.
Remember, if you were shopping for a new car, you would shop around and find the best deal for the car you desire. The same goes for finding a lender. All lenders have different criteria, offer different type of mortgage loans, offer different interest rates, and loan fees.
You can find a lender in a variety of ways. You can talk with you own bank, check through the yellow pages, search online, or talk with your real estate agent. In most cases, your real estate will be able to give you ideas of lending companies they normally work with that might be able to provide you with the type of mortgage loan you desire.
What other costs will I incur besides the monthly mortgage payment?
Of course, you will have to pay your utilities such as waters, sewage, gas, electric, and telephone. If these were included when you were renting you should be aware that now that you own a home, you will be responsible for these payments as well. In most cases, you can talk with your real estate agent to learn the average costs from the previous owner or if it is a new home, what others might be paying in the area for the same size home.
If you are moving into a community such that has a homeowners association, you will be required to pay dues for upkeep of the community. Some of these dues pay for upkeep of a community swimming pool, lawn care, and even storage facilities on the property.
Property taxes and insurance are other payments, but in most cases, these are included in with the mortgage payments. You should talk with your lender to ensure these are included and if not to learn how much the payments are and when they are due.
What the mortgage payment covers
Your mortgage payment will include:
- The principal – the amount that you borrowed to purchase your home.
- Interest – this is the payment to the lending company for the money you borrowed to buy the home.
- Insurance – to insure the home and property against fire and other hazards.
- Taxes – These property taxes are paid to the city and county.
What to take when you apply for a mortgage loan
- Social security numbers for yourself and spouse if they will be on the loan.
- Checking and saving account information for the last 6 months.
- Information of all other assets such as bonds or stocks.
- Paycheck stubs for proof of income.
- Credit card information.
- Outstanding loan information.
- 2 years income tax statements.
- References for employment.
In some cases, you may need more information, but these are the basics that you should bring with you when you apply for a mortgage loan.
