Your Financial House in Order? Good credit = good interest rate. For at least one year prior to purchasing a home, you should assure that every credit card bill, rent payments, car notes, and other debt is paid on time and revolving debt (such as credit cards) should be below 35% utilization.
How will you pay for this dream? Finding the right house is second only to finding the right loan. There are many loan types and programs available. Some loan types are: FHA, VA, Conventional, 203(k), and USDA. It is important to explore all of your options with the lender to determine what’s best for you. Down payment and closing costs play a key role in obtaining a home loan. Closing costs cover fees, taxes, and administrative expenses. Your down payment is the amount that you put toward the purchase of your home and is deducted from the loan amount. For example, an FHA loan requires a 3.5% down payment (purchase price x 3.5% = down payment amount). Your lender will discuss this in more detail.