BREWSTER, N.Y. -- What better time is there for home buyers to invest in a home than during June—National Homeownership Month? Here, David Carey, vice president, residential lending manager, Tompkins Mahopac Bank in Brewster, offers five tips to consider before setting out in search of that perfect property.
- Because mortgage lenders seek a debt-to-income ratio minimum of 43 percent, home buyers should assess where they stand before looking for a home by calculating what percentage of their income goes to essential expenses, like mortgage or rent payments, along with ongoing expenditures for insurance, taxes, credit cards and such. Together, these payments shouldn’t surpass 43 percent of the household’s total income.
- Becoming prequalified for a mortgage through a lender’s short application and credit check can give home buyers a sense of what they can afford in a mortgage, which can be helpful during their property search. It also shows home sellers and real estate professionals that the buyer is earnest about purchasing a home.
- The Commitment Letter is a more rigorous application process that follows a mortgage prequalification and involves a detailed assessment and documentation of a buyer’s financial standing and credit history. Collateral a buyer has to offer against the loan also is reviewed.
- The down payment amount for a home, which is payable at the closing of a property, is another consideration. Because this can be a substantial amount of money, its source must be verified by a lender as part of the mortgage/sale process.
- In addition to factors involved in financing the purchase of a home, buyers also should look into ownership costs for a desired property, including those for its utilities and maintenance, as well as school and property taxes, especially since these can add up.
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