If you’ve set a goal of making 2021 the year you purchase a home, let us start this off by saying congratulations! This is a big move and one that can help you build a significant amount of financial strength and equity.
While the mortgage process can be intimidating, we’re here to walk with you through it all, and doing a little work before you actually get into the market can set you up for success. Here are some of the goals you can set to get yourself ready to buy a home in 2021:
Build a down payment. As we covered before in our post about private mortgage insurance, most American homebuyers don’t reach 20% of the purchase price down payment target. Hitting that mark can save you significant money over the life of the loan and make it easier to get the financing you want.
Regardless of whether you’re working to get to that level or just trying to build something to pay upfront toward the purchase, it’s crucial that you have some money to put down. Many loans require buyers to have at least some money to pay at the start to show they’re financially prepared for the debt to come.
Learn about available assistance. While many homebuyers aren’t aware of them, there are a ton of assistance programs that help people purchase the property. The Federal Housing Authority maintains a list of down payment grants and assistance, and individual states and municipalities maintain similar catalogs. There may be other opportunities available to you, depending on your situation. If you’re curious about those, give Journey a call and we’ll discuss potential options.
Figure out which loan type is best for you. There are a ton of options when it comes to mortgages and it can be hard to wade through them all.
Do you want a standard or fixed rate? Fifteen or 30 years? Subsidized? VA? FHA? Get to know the home loan types to narrow down your options. If you still aren’t sure after doing your homework, this is another choice Journey can help you with.
Learn about the available tax benefits. While purchasing a home can seem like it’s all about expenses, it’s worthwhile to look into the financial rewards the move can bring. For example, there are some tax benefits to buying a home, including deductions for mortgage points, interest and private mortgage insurance.
Do the math. The tried-and-true advice from experts is you should pay no more than 30% of your income for housing. That threshold isn’t set in stone—some people do OK with more than that if they don’t have other debt, while others should stay well under that mark to manage everything—but it’s a good one to keep in mind as you set a budget for your home purchase. And setting a budget is important to ensure you don’t get in over your head.
The mortgage experts at Journey Home Lending are ready to help walk you through the home loan process from start to finish. Give us a call and let’s get started today!
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