Tips for Financing your New Home
Buying a home is one of the most exciting experiences of your life. But wading through all of the paperwork and piecing together the finances can cast a pretty dark cloud over the joy.
Before you buy your next new home, consider these tips to clear up some misconceptions and streamline the process, so you’ll be living in your dream home in no time.
1. Before you do anything
— even before you start the home hunt — get your finances in order.
You need to have a clear understanding of your finances — where you stand today — to know where you can be tomorrow. This will help you get pre-approved for a mortgage, which will help narrow down the home search. Get a free copy of your credit report to make sure your credit reports are correct, and address any red flags there that you can, before you reach out to a mortgage provider.
2. Contact a Local Loan Officer
– Online lenders will lure you in with attractive rates, but you’ll likely pay more in fees. Local loan officers rely on local Realtors and Home Builders for referrals, and will deliver superior service to keep the referrals coming. When it comes to a purchase as large a home nothing beats a the personal relationship with an experienced local lender.
3. Consider buying a new home.
Often, if you buy a new home, the builder will help guide you through the process and eliminate fees and steps. Some builders offer great financing package. If you’re building it from the ground-up, you have more control over the price by choosing different floors, counters, light fixtures, appliances and other options, and cutting back on upgrades, landscaping, paint and other optional features. Builders may also have programs to save home buyers thousands of dollars in out of pocket cost.
4. Ask about other financing options that you can use with a new home.
Consider special construction financing and bridge loans when you are building a new home. You can often get these kinds of loans even without selling your current residence.
A bridge loan is a temporary loan to “bridge” the time between building a new home and selling your existing home. You can use a bridge loan as a downpayment for your new property, with the expectation of paying it back when you sell your current house.