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Tips for Buying a Home

Now is a great time to buy a home since rates continue to be low. In fact, the Fed recently announced they intend to keep interest rates low at least until 2013. So anytime between now and 2013 is a great time to buy a home.
Finding your home and determining what you want in it is the fun and exciting part of the home buying process. Determining what you can afford and how much you can get approved for is not so fun. Here are a few smart tips that will make the money factor easier and help secure the home of your dreams:

  • Before you begin house hunting, get pre-qualified or pre-approved for a loan up to a certain amount. Pre-qualification helps you get the house you want, assuring the seller you will be able to secure financing. It also prepares you for what you can afford; sparing you any disappointment in the event you fall in love with a home outside your price range.
  • According to industry standards, your mortgage payment should be less than 28% to 33% of your monthly gross income. Your total long-term debt load should be less than 36% to 38% of your monthly gross income.
  • Since mortgages are such large loans, small changes in interest rate or loan term can make a big difference in your payment and how much you can afford. Work with your loan officer on weighing out different scenarios regarding terms and rates to see what works best for you.  
  • Change is inevitable. As you change, your mortgage needs may change. Remember, you can always go back and refinance your mortgage to a better rate or different term depending on your financial needs.
It is pretty common to seek out the lender offering the lowest interest rate and the lowest fees. However there is so much more that goes into finding the right lender for you. Things you should ask when looking for the right lender:
  • How long have they been doing mortgages?
  • Do they charge closing costs or additional fees?
  • Do they provide you with solutions in determining your down payment amount and avoiding PMI?
  • Are they helpful in determining how much you can afford to borrow?
  • Do they provide information and advise you on the mortgage option best suited for your needs?
  • Do they offer automatic payment on your loan?
Alabama Telco offers various mortgages for both current homeowners looking to refinance and those looking to buy. Our mortgages feature low interest rates, affordable down payments and competitive closing costs. And to help you make the best decision for you, we even have a Mortgage Specialist on hand. He can evaluate your financial needs and advise you on which mortgage may best suit you.

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