Basic facts you need to know.
As a homeowner, or prospective one, you can never have too much information. Here are a few tips to be a successful homeowner.
1. Pay on time.
Always pay your mortgage on time. It's one of the best things you can do to maintain healthy credit. If you are concerned about your ability to pay your existing home loan, talk to your lender.
2. Learn what your payment covers.
Your home payment includes payment of principal, interest, and in many cases estimated property taxes, and homeowner's insurance (collectively known as "PITI"), plus any homeowner's association dues or private mortgage insurance if applicable.
3. Keep an eye on your credit score.
A credit score under 620 could make it more expensive to obtain a loan, so try to keep your credit score as high as possible.
4. Jump start your savings.
If you don't have the required down payment saved, which could vary depending on the type of home loan you select and the overall price of the house you want, see our tips for how to jump start your savings.
5. Find out how to improve your credit score.
Consulting with a credit counselor or financial advisor on your personal situation is a good method for learning how to improve your credit score.
6. Get prequalified.
Once you've built your budget and know how much of a monthly payment you can comfortably afford, getting prequalified allows you to estimate the loan amount and type that's right for you. Then, when you're searching for a home, you'll know exactly which homes are in your price range.
7. Be upfront with price range and preferences.
When examining your loan options, be sure to let lenders know the price range and type of home you want to buy. Rates and terms for single-family homes are often different than rates for condos or second homes.
8. Consult with your real estate professional.
Work closely with your real estate professional for the best price negotiation strategies.
9. Compare APRs
An advertised rate isn't always the same as your loan's annual percentage rate (APR). The APR is the true total cost of your loan stated as a yearly rate and includes additional fees you would pay, so make sure you compare one loan's APR against another loan's APR when you're shopping for a loan.
What's next? Knowing what to expect with the closing process