If you’re a rookie in purchasing a home and need to have your questions answered, then this article from USA Today is what you’re going to need. Read the summary of the chat between the National Foundation for Credit Counseling and first-time homeowners.
Don’t know the first thing about becoming a homeowner? As part of USA TODAY’s partnership with the National Foundation for Credit Counseling, the second of six weekly Twitter chats addressed issues for first-time homeowners. USA TODAY’s Hadley Malcolm moderated, while John Berry, an education specialist at consumer credit agency Money Management International, answered participants’ questions. Here is a summary of the chat.
Q: What is the first step to purchasing a home?
A: Making sure homeownership is right for you and fits into your family goals and budget. Then you can start talking to lenders about whether you qualify for a mortgage.
Q: Should you look at more than one lender? How do you choose a lender?
A: Yes, you want to compare rates and terms to make sure you are getting the best deal. A good place to start is your local bank where you already have a relationship.
Q: Can my credit score affect the interest rate on the loan for my home?
A: Absolutely. You want your score as high as possible to qualify for the best rates.
Q: Is working on your credit the hardest part of buying a home?
A: It can be, but you also need to build up savings for a down payment and closing costs.
Q: Are there still ways to buy a home with no money down?
A: Conventional and FHA loans always need money down, but VA loans can sometimes require no money down.
Q: What does someone need to take with them when they apply for a mortgage?
A: You can apply for a mortgage with just your information (name, date, Social Security number, place of employment). To get pre-approved, you may need more, such as proof of income, pay stubs, tax returns and proof of down payment.
Q: At what point do you “lock in” your mortgage rate?
A: Locking your rate allows you a certain amount of time to find a home without fear of increased rates. Rates are typically locked for periods of 30 or 90 days, but determined by the lender.
Q: How do you account for a new home purchase on your tax return? How does it affect your tax situation?
A: The interest you pay on your mortgage is tax deductible, so owning a home can sometimes yield tax benefits.
Clients looking for real estate opportunities, whether a two-story home or a one-bedroom apartment, contact seasoned realtor Marian Khosravizadeh. For the latest news on real estate, follow this Twitter account.