Home Loan Homework

12161928_sI get lots of real estate related questions throughout the course of my day and I thought I’d post them every now and then just in case its something you are thinking about too.  Here’s a good one about home loans:

Q.  I am ready to buy a home and will need a loan.  What homework should I be doing now?

A.  Here are three big points many people don’t consider when buying a home:

  • Understand how much home you can afford.  Starting with a clear dollar amount will help you focus your home search and avoid disappointment later when meeting with a lender.  Calculate the two numbers bankers and mortgage lenders use to determine the how much they will loan to you:  payment-to-income ratio and debt-to-income ratio.
  • Understand the basics of home financing.  Your ability to afford a home will be related to its price, your down payment (and the amount you’ll finance), the interest rate and points of your loan, the term and the type of your loan.   Study these items and the relationship between them.
  • Save thousands by making your own mortgage acceleration payment schedule.  Take your current monthly mortgage payment of principal and interest and multiply that number by 13.  Divide that total by 12 to get your new “accelerated” monthly payment.   Using this plan to pay an extra month of principal and interest each year shaves years off of life of your mortgage.

Want to learn more ways to save money?  Ask for my Free Report called “7 Secrets For Saving Thousands When Financing Your Home.”

Do you have a question you want answered related to real estate or home ownership?  Feel free to call me at 303-579-1617.  Perhaps I’ll feature your question in my next post!

I am a Boulder County real estate specialist. Over the past three years, I have earned the distinction of being named a 5280 Five Star Realtor. This puts me in the top 7% of all Realtors in the Denver Metro Area for customer satisfaction. If you would like to schedule a buyer or seller meeting with me, please feel free to call me at 303-579-1617 or contact me by email.

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