Many buyers when deciding to buy a home need to obtain a mortgage or finance their house.

Trulia, a real estate website, came up with a five page guide that describes what a homebuyer needs and should know, and educates them on financing a home. Thank you, Trulia for this guide!

Do you know what determines your credit score?

According to this guide, 35% of it is your payment history, 30% how much you owe, 15% the length of your credit history, 10% new credit (meaning how many new attempts you’ve made to get credit,) and 10% types of credit. What are types of credit? Loans are one type, while credit cards are another. Loans tend to favor more positively because they generally go down to a zero balance, while a credit card often does not.

What can you do to help your score? Don’t carry a lot of store charge cards. Keep your “older” credit cards active, because they help with your history, and show that you have available credit, but aren’t using all of it. The “how much you owe” statistic is in relation to how much credit is available to you.

Creative Ways to Save for Your Downpayment.

Most buyers will need to make a downpayment on their house. There are a few loan types that do not require downpayments.

How can you save up for this large chunk of money?

Slow your spending. The great tip from this guide is for purchases $25 or more. Give yourself 10 days to think about that item. If you still need it at that point, then buy it. But there may be many items you decide you don’t need to have if you take time to consider them.

Eat in. Don’t stop for a cup of coffee, make it at home. Bring your lunch. It’s amazing how much you can save per day if you make these changes. (I would track it, too! If you thought about how much you spent in a day on coffee, lunches, etc, you may be surprised!)

Have a budget and track your spending. All of it. Take time each week to look at where you may be able to make cuts.

Big items: Many people can take payroll deductions right from their checks. Have it deposited into an account just for your downpayment. If you don’t have the cash in hand, you may be less likely to spend it!

Tax Refund — if you are getting one, put it right away for a downpayment!

Questions to Ask Your Loan Officer.

Applying for a mortgage can be a daunting task. There are a number of questions you can ask of your mortgage professional which may help to ease your mind or answer some of your questions.

Are You a Bank, Broker or Both?

Depending on what type of bank they are, they may be able to offer you a few different loan options. One may not be better than the other for your circumstances!

Will You Explain the Good Faith Estimate?

The answer should be YES! Try to understand as much as you can about what money you will need to have, bring, and what each charge means!

Can You Provide Me with a Fee Sheet or Estimate of Charges?

Again, the answer should be YES. The newer good faith estimates may not tell you the whole story. A fee sheet can be much more descriptive way to explain what is happening with your money!

How Much Time Do We Need Before We Can Close?

Each bank and loan type may be different. Some loan types can settle quickly, others may take a longer time. Your loan officer often knows about how long it takes his team to work through a file. That doesn’t mean there is a guarantee, and there could be complications that arise while your loan is being processed.

Here is the Guide for Buyers: Financing Your Home Purchase courtesy of Trulia.

If you are buying a home in Baltimore, I would love to help you! Contact me today!