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:
How to Get a Kansas City Home Mortgage
If you are among the many people planning to buy a house this year, it’s a great idea to understand the process of getting a Kansas City home mortgage. It will help you save money in the long-run. Making intelligent, informed decisions about your finances can be beneficial to you and your family. Use the following tips to ensure that your lending journey is smooth and easy.
Make a monthly household budget
As a homebuyer, you can rely on a bank or lender to tell you how much financing you can afford, or you can figure it out on your own. In some cases, lenders will approve buyers for more than what they are willing to borrow. It’s important to determine what you can reasonably spend on your Kansas City home mortgage each month. Here are a few ways to make budgeting easier.
- Pay yourself first: Saving a percentage of your income each month can help you prepare for your long-term goals. Many people don’t follow this approach but it’s vital to be smart about your money. You should decide how much you can comfortably set aside into a savings account, so you have funds for emergencies or a down payment.
- Create or find a financial planning template: This can be a very useful instrument for any homebuyer. It can tell you how much money you have, where it’s coming from, and where it’s going. There are a variety of free templates accessible online.
- Find out your actual monthly income: Your income is not based solely on your salary. Other sources, such as monetary gifts, work bonuses, stock dividends, tax returns, and interest from savings accounts, are all included in your monthly income.
- Make a list of mandatory expenses: Automobile loans, insurance, utility bills, taxes and groceries are just some of the mandatory expenditures of living that cannot be avoided. Evaluate all of your expenditures and see if there is anywhere for you to cut costs.
- Make a list of discretionary expenses: Eating out, unnecessary shopping trips, lattes from the coffee shop, theater tickets and vacations are all luxuries. Any item or service that is not required for basic survival is a discretionary expense. An effective way to curb these spending habits is to be conscious of where your money is going. This will help you to properly delegate your income.
Researching your options
For today’s homebuyers, there are multiple types of loans available. Although Conventional mortgages are very popular, they are not for everyone. Some will choose a non-conventional financing, such as a FHA loan. It’s important to assess all of your possible choices before making a final decision.
Questions to ask when considering a Kansas City home mortgage:
- How long do you plan to stay in your home?
- What is your credit score?
- What is your maximum spending limit?
- Would you prefer a fixed or adjustable-rate loan?
- Do you plan to make a down payment or 5% or less?
- Will your down payment size be 20% or more?
Lastly, don’t wait until you have found your dream home to start the loan approval process. This can often lead to missing out on a great opportunity. Preapproval will give you an indication of what your financing options are. It can also remove some of the uncertainty when buying a home.
Finding a reputable lender
A great lender can offer guidance, but it is ultimately the borrower’s responsibility to choose the most appropriate loan for their needs. By setting your maximum monthly payment, you can stay within your budget easier. If your household income does not exceed your monthly expenses, it may not be a good time for you to consider a Kansas City home mortgage.
- Talk to a few different companies to find the right mortgage for your situation.
- Always speak with a lender before house-hunting.
- Remember, preapproval does not bind you to a particular company.
- Ask your real estate agent who they would recommend for you.
- Make sure to ask about turnover time to avoid your loan being delayed.
- Request a side-by-side comparison of their loan options.
Want to learn more about how to get a Kansas City home mortgage? Complete a Cornerstone Mortgage, Inc. contact form today or call: 816-525-9910. Their loan officers will help you determine the best home loan for your needs.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.