Shopping for Your First Residence – FHA Information and Views
What questions should you ask yourself before making an offer to buy your first home? There are many areas to keep in mind when preparing for a large financial obligation such as a mortgage.
Is your finance house in order?
Can you realistically afford the house you are buying? The answer to this question goes on as if after your other monthly expenses you have enough money to pay your mortgage.
For example, it is important that you can save on your upfront expenses (down payment and closing costs). But what happens AFTER these fees and expenses are paid?
It is a good idea to save some extra cash on top of your cash in order to close it down – having some extra funds to help out during difficult times is a very good thing to consider.
Not everyone can do this, but if you can then definitely consider this one.
With an FHA mortgage, for example, you have the option of negotiating with your seller so that he can contribute up to six percent of the offer price to your closing costs. Not all sellers are willing to do this, but it is a smart idea to try.
Combine this help with a local down payment support program and you may find that your upfront cash reserves go much further.
How Much Home Loan Is Enough?
Do you have too much outgoing debt to pay for the new mortgage on top of your other monthly payments? This is definitely a question your lender will be asking in the process.
The lender is responsible for obtaining your credit reports and ratings, determining your debt ratio, and other financial qualifications. Processing your debt as early as possible can be of great help in this area.
Reduce your debt as much as possible before applying for a new mortgage loan.
What kind of home do you need?
A good real estate agent can help you more efficiently by narrowing down unwanted property types.
The same is true if you’d rather shop in a specific area – some in major cities prefer to be close to services, amenities, or even major highways (for commuting purposes).
If these are needs that you want to address, then you should share them with your broker.
Natural disaster Zones
Is your dream house in a 100-year-old flood plain? Or in an area prone to forest fires, mudslides or severe snowstorms?
And if you are new to the region, how would you know? It’s a good idea to ask your lender or broker, but you should also look at the climate data for your area to see how extreme temperatures, rainfall, snowfall, or other data can affect your decisions.
And don’t skimp on home insurance! Natural disasters may require specific insurance policies, and if you don’t have name insurance for a particular type of disaster or problem, you won’t have protection.
For example, your insurance policy may cover certain types of water damage, but if your policy doesn’t mention “rising water” by name, you may not have actual flood protection. Be sure to ask about such coverage.