Your Home Financing Planner

Thinking of buying a home soon? Tired of paying your landlord’s mortgage every month? I strongly encourage home ownership but while it may not be for everybody, it’s good for most. There are multiple advantages to owning vs. renting. But it’s also not something to just jump into. Here are some tips to make your home buying and financing much more smooth.

First, get preapproved. This doesn’t mean going online and using one of those calculators. You need to actually speak with an experienced loan officer who can tell you what you can qualify for, your monthly payments plus your anticipated closing costs. This will tell you how much you need to save up. Also note that as interest rates change up or down, your qualifying amount will also change. 

Put yourself on a savings path where you regularly add some money into the ‘kitty’ that will slowly build up to the amount needed. Also, remember that there will be additional expenses after you move in. Furniture, upgrades, and maintenance for the new property will be required.

Your available funds can come from various sources and some sources cannot be used. Available funds typically come from your checking or savings account. They can also come in part from a financial gift from a family member. 

You might also be able to borrow against a qualifying 401(k) account. Your employer can tell you whether or not you’re able to borrow from your 401(k). It’s also possible to borrow against any appraisable asset you own, or you can sell some of your assets to provide the funds needed. You can sell a car for instance. Just make sure you document the transaction with a solid paper trail. 

If you do get funds from sources other than your bank accounts, it’s important to make sure those funds can be used as ‘available.’ When lenders look at your bank accounts, they’ll notice your regular deposits such as on the 1st and the 15th. However, if an amount just shows up that’s not from your paycheck, lenders will need to ‘source’ those funds to make sure they are coming from an allowable account.  

If you’re not sure, make sure you speak to your loan officer and explain any situation upfront. You don’t want to head to the closing table and your loan officer calls you with a surprise announcement. It’s your loan officer that will walk you through the process. | bit.ly/3XLoEJb


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