Buying a home is exciting and, let’s face it, complicated. There are many important things to consider throughout the process, especially if you’re a first-time homebuyer. Here’s some information that will keep you on track.

Define what affordable means to you

Only you can decide how much you are comfortable paying for your housing each month. In most cases, your lender can consider only if you are able to repay your mortgage, not whether you will be comfortable repaying your loan. Based on your whole financial picture, think about whether you want to take on the mortgage payment plus the other costs of home ownership such as appliances, repairs, and maintenance.

Our friends at AMEC understand the magnitude of this decision and it is their goal to make your transition into home ownership unforgettable.

Understand your home loan options

The kind of mortgage you choose has a big impact on how much you end up paying—how much you’ll have to pay upfront, your monthly payment amount, and the total cost of your loan over time. It also affects the level of risk you take on. Knowing what kind of loan is most appropriate for your situation prepares you for talking to lenders and getting the best deal.

Our friends at AMEC offer a variety of home loan options that are perfectly tailored to your circumstances and goals. Here is an overview of some of the programs offered:

  • Fixed Rate Mortgage: With a fixed-rate mortgage, your principal and interest payment stays the same for as long as you have your loan.
  • Adjustable Rate Mortgage: With an adjustable-rate mortgage (ARM), your payment often starts out lower than with a fixed-rate loan, but your rate and payment could increase quickly. It is important to understand the trade-offs if you decide on an ARM.
  • Conventional Loan: A conforming mortgage loan, often called a conventional loan, is a mortgage that is equal to or less than the loan limit set annually by Fannie Mae or Freddie Mac, the government-sponsored agencies that purchase the bulk of U.S. residential mortgages from banks and other lenders. The current conforming loan limit for a single-family home or condominium in most areas of the country is $417,000, with higher limits allowed for designated high-priced markets.
  • FHA Loan: The Federal Housing Administration (FHA) offers FHA-backed loans that are designed to provide lower down payments and greater flexibility in lending guidelines. Available for single- and multi-family homes, FHA loan financing options include traditional fixed-rate products, adjustable-rate mortgages and temporary interest rate buy-downs.
  • VA Loan: The U.S. Department of Veterans Affairs (VA) offers VA-backed loans to veterans, active-duty personnel, reservists/National Guard members and some surviving spouses. When the loan is approved, the VA will guarantee part of it. The amount of the VA’s guarantee usually depends on the size of the loan.
  • USDA Loan:  The USDA loan provides low and moderate income borrowers with better affordable housing finance options with little or no down payment or out of pocket costs. The property must be located within a USDA designated area.
  • WHEDA Loan: WHEDA (Wisconsin Housing and Economic Development Authority) home loan programs are available only to home buyers purchasing an owner-occupied home in Wisconsin.
  • Jumbo Loan: Jumbo mortgage loans, often called nonconforming loans, are designed for home buyers who need to finance especially large purchases. A loan is considered jumbo if it exceeds the conforming loan limit, which in most areas of the country is $417,000, as defined annually by the government-sponsored agencies Fannie Mae and Freddie Mac.

Not sure what loan option is right for you?  Contact an AMEC loan officer today!

The power of a pre-approval

You’ve figured out what affordable means for you. You’ve reviewed your credit and the kind of mortgage and down payment that best fits your situation. Now is the time to start shopping seriously for a loan. The peace of mind that comes with knowing that your mortgage loan and credit report have been pre-approved will allow you to shop for your new home with confidence. 

Getting Pre-Approved early in the process allows you to move quickly once you have found your dream home. And when you find that dream home and are ready to make an offer the fact that you have already been pre-approved for your loan amount will give the seller confidence in you as a buyer.

Our friends at AMEC make the pre-approval process easy and stress-free.  Contact them today to get pre-approved!

This is not an endorsement. American Mortgage & Equity Consultants, Inc. works independently of Keller Williams Realty or the Caleb Hayes Real Estate Group. They are paid advertisers and are in no way affiliated with Keller Williams Realty or the Caleb Hayes Real Estate Group. You are not required to use the listed service providers as a condition for your purchase, sale, or refinance of a Keller Williams Realty or the Caleb Hayes Real Estate Group listed property. There may be other mortgage lenders that provide similar services. You are free to shop around to determine that you are receiving the best services and the best rate for these services. All mortgage lenders are solely responsible for their actions.