Many potential home buyers have a lot of misconceptions about the home buying process and what it takes to get a mortgage. Many think it is actually more difficult to get a home – you need more down, you need more credit, etc.
Fannie Mae has some suggestions for those that are thinking about buying a home – hopefully some of this will help lower the stress of purchasing a new home.
One of their suggestions is to learn all you can about mortgages. There are many different places to go for that – you can definitely go search the internet but you may not get the true story. Look at websites such as fanniemae.com or freddiemac.com. You can also look at local county or state sites – mnhousing.gov has a lot of information. There are also first time homebuyer classes available. Many counties have classes put on by Homestretch – Dakota county has a class once a month, many local community organizations also have the class. There are schedules available at hocmn.org.
Talk to a professional – don't just ask friends -talk to a loan officer and ask questions about your situation. I taught the mortgage section of the Homestretch class this week and had lots of good questions. It's amazing what people think about mortgages and what you need to do to get a mortgage!
Look for down payment assistance. There are many programs available depending on where you want to live. Some require you to be a first time homebuyer, some don't. There are county programs and city programs – some are grants, some are deferred loans.
Compare mortgage lenders. When I teach the class I always tell students call more than one loan officer – compare both interest rates and closing costs – and ideally do it on the same day about the same time. Many of us are very similar but you want to be comfortable with your loan officer.
You also want to consider long term costs – there is more than just your mortgage payment when you buy a home. You will also be responsible for the maintenance on the home. Depending on the age, there may not be much, but sometimes you may need a new roof or furnace – those items can add up. Have a savings account that you can use if you need to make a repair. Many financial counselors will suggest having 4-6 months of house payments available. That money can be very helpful if you have a sudden repair or if you lose your job.
The more knowledge you have about your situation and the mortgage process, the less stress you will have! There are some good sites that you can get a lot of information at – use them!