When you start thinking about buying your first home in Fredericksburg, VA the first question on your mind is typically "how much home can I really afford?"
The good news is that in today's market place if you can afford rent, you can probably afford to buy a home. The mortgage you can qualify for depends on many factors, including your target monthly payment, annual income, and down payment amount. You'll also need to consider any existing debts you have whenever you're considering buying. It is often helpful to use a local Fredericksburg, Stafford area lender who may be familiar with the area.
3 Rules to Remember When Shopping for a Mortgage
Since you're in the market for a new home, you're probably in the market for a new mortgage. Here are 3 critical shopping tips for anyone looking for a new loan when you are thinking about buying a home in Fredericksburg, VA and surrounding areas.
- Know the Terms
All the terms of a loan matter. Unfortunately, shopping for a mortgage is not as simple as finding out how much a lender will let you borrow and at what interest rate. You'll want to get a complete breakdown of what any offer your receive means to you on a monthly basis as well as how much money you'll be spending over the life of the loan.
- Not All Mortgages are the Same
There are several mortgage types available to residential home buyers. Most people will shop for a traditional fixed rate mortgage, but other options are available including adjustable rate loans (ARMs), Federal Housing Administration loans (FHAs), and Veteran's Administration (VA) loans. You'll want to be sure to understand what kind of loan a lender is offering you.
- Fees, Fees, Fees
Most loans have fees associated with them in addition to the principal amount borrowed to buy the home. You can sometimes borrow the money need to cover these fees, but that will obviously increase the overall amount of debt you undertake. Some fees are paid up front, and others are not due until closing.
Why Get Pre-Qualified?
1. Pre-qualification acts as a dry run of the loan application process. The mortgage lender will use details you provide about your credit, income, assets, and debts to arrive at an estimate of how much mortgage you can afford. The whole process may take only minutes or a few hours at most and is free.
2. While a "pre-qual" is non-binding to the lender (because the information you provide has not been verified), it does serve as a good indication to potential sellers of your general creditworthiness.
3. These days most sellers will NOT accept an offer without at least a pre-approval letter, so if you are serious about buying this is the first step towards getting you in your new home.
Courtesy, Pam Martin eXp Realty, Fredericksburg, Stafford VA