When obtaining a home loan, you’ll receive two important documents from your lender: a loan estimate and a closing disclosure. On the surface, these documents are very similar, but they both serve different purposes. Here’s what you need to know about the differences between these two forms and what each means for you:
5 Common Pitfalls When Getting Your First Home Loan, St. Louis
The very first thing you can do to avoid these pitfalls is to do your homework on how to get a home loan (St. Louis). By doing some research, you can learn the financing mistakes from previous individuals who have purchased a home. One of the biggest slips is to only focus on your monthly payment. Besides your home loan (St. Louis), there are many other costs involved. For example, when you are managing your financing, it’s important to have money aside for closing costs, down payment, maintenance fees, and home replacement costs. Some people have the illusion that if they can afford rent, they can have enough money to make payments for a home loan (St. Louis). What they don’t know is that it’s important to have extra money for cash emergencies or if something breaks down at your house.
Another common mistake is putting your focus on finding your dream home. Getting pre-qualified for a home loan (St. Louis) is crucial. This will allow you to know your price range on the homes you can view. The worst disappointment is to find your dream home and find out afterwards that your lender will not finance the purchase. The third pitfall is thinking that you can handle this big purchase on your own. The best thing to do is get guidance and advice from professionals who are able to help you make informed decisions.
One huge mistake is depleting your savings for your down payment. Buyers who do this don’t look at the big financial picture. If you drain your account to make lower monthly costs, this will not give you a cushion for when you are in trouble or need cash. You want to find a home that fits with your financial situation where you are comfortable making a down payment but still have some money tucked away for personal or house emergencies. The last common mistake is financing new furniture and appliances to complete your dream home. You want to spread out your purchases and pay in cash. This will avoid incurring interest in the items you buy.The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.