Mike Croxall: Simple Steps To Financing Your First Home

Friday, February 24, 2017 - by Mike Croxall, president, Home Builders Association of Greater Chattanooga

As the Chattanooga area continues to enjoy a growing economy and steady rise in consumer confidence, many first-time home buyers – including millennials – are gearing up to become home owners. Yet, the abundant amount of paperwork involved in the home financing process can intimidate even the most eager of prospective home buyers.

Fortunately, with advanced preparation and a personalized to-do list, new home buyers can easily stay on top of the financing process. You need to decide how much to spend on your home and which type of mortgage will work best for you, as well as understand the settlement process.

Before you visit a sales office, model home or open house, you should take advantage of the many sources that can help ensure you’re in the best possible financial situation.

Be Realistic About What You Can Afford

Figure out what you can comfortably pay on a monthly basis. Write down all your monthly expenses including loan payments, utilities, insurance, credit cards and don’t forget food, clothing and entertainment expenditures.

When determining the monthly payment that’s within your reach, remember that in addition to the monthly principal and interest, you will also be paying into escrows for property taxes, hazard insurance and possibly mortgage insurance or a home owners or condominium association assessment. Many real estate-focused websites have mortgage calculators that are a great way to figure out what your monthly payments would be based on current interest rates and down payment amounts.

Pay Down Your Debts

Debt that you carry on your credit cards will limit the loan amount that your lender will approve. Lenders typically want to see a total debt service ratio that is less than 40 percent of your monthly income. 

Get Objective Advice

Attend a first-time home buying seminar or talk to a credit counselor who does not work for a lender. The U.S. Department of Housing and Urban Development (HUD) offers free housing counseling and seminars. You can find more information by visiting hud.gov or calling HUD's interactive voice system at (800) 569-4287. 

Pre-Qualify for Your Home Mortgage

To ensure the financing process goes smoothly, buyers should consider pre-qualifying for a mortgage and having a financing commitment in place before shopping for a new home. Buyers also may find that some home builders have arranged favorable financing for their customers or offer financial incentives.  Pre-approval also enables you to quickly make an offer when you find a home, and is attractive to sellers who are considering multiple offers. A lender’s pre-approval would still be subject to a final verification of your credit and a satisfactory appraisal.

Qualifying for a mortgage and saving for a downpayment remain primary obstacles to homeownership. To address these issues, Fannie Mae and Freddie Mac offer low-downpayment mortgage programs geared primarily toward the first-time home buyer market. These lenders will now offer mortgages with 3% downpayments, allowing more creditworthy borrowers who lack the funds for a large downpayment to obtain a home mortgage.

After taking these steps to get your financing in order, finding your first home will be a much more enjoyable experience. For more information to help ease the first-time home-buying stress, contact the Home Builders Association of Greater Chattanooga at 423 624-9992.

 



Brant Mason Selected As Habitat For Humanity's Chief Financial Officer

Habitat for Humanity of Greater Chattanooga Area, a faith based non-profit organization dedicated to transforming the Chattanooga area by working with financial partners and volunteers to build simple, decent and affordable homes for working families, announced the addition of Brant Mason to its leadership team as chief financial officer. Mr. Mason is a Certified Public ... (click for more)

Real Estate Transfers For April 12-18

NOTICE: The Hamilton County Register’s Office did not publish this data. All information in the Register’s Office is public information as set out in T.C.A. 10-7-503. For questions regarding this report, please call Chattanoogan.com at 423 266-2325. GI numbers, listed when street addresses are not available, refer to the location of transactions (book number and page number) ... (click for more)

Man Who Killed 4 At Waffle House Is In Custody

Travis Reinking, 29, the suspect in the shooting at a Waffle House near Nashville on Sunday, has been taken into custody, according to police. Reinking, who killed four people and injured two others at a Waffle House near Nashville on Sunday morning was on the loose Monday morning and had been added to the Tennessee Bureau of Investigation's ‘Top 10 Most Wanted’ list. ... (click for more)

Pet Raccoon That Was Destroyed Did Not Have Rabies

A pet raccoon that was destroyed in order to test for rabies after biting a neighbor child did not have rabies, Chattanooga attorney Chris Jones. The family has been advised it can pick up the remains of Boomer at the Chattanooga Hamilton County Health Department. Attorney Jones, who specializes in wildlife cases, earlier argued there was no valid reason for health ... (click for more)

Set Up A Council On Love, Not A Council On Hate - And Response

In Mayor Berke's April 19 version of the Berke Bulletin, he announced plans to establish a Council on Hate and indicated a focus on tolerance. I beg of him to reconsider that plan. One problem in Chattanooga and in other places in America is that there are some people who have already established an informal version of a Council on Hate. I suggest that a more productive plan ... (click for more)

Roy Exum: Always Know The Facts

I adore the fact so many of America’s high school and college students are very active in our battle against violence in our schools but bemoan the fact that when you combine youth and ‘lack of experience’ they often are misguided and ill-informed. The best example came on Saturday when a reporter for Campus Reform walked around the Cal State-Santa Barbara campus asking the students ... (click for more)