Getting a mortgage in Georgia is a serious process. There is a list of items to complete, and one is looking for an excellent bank to help you finance your new or existing home. Getting a new home is both exciting and challenging, yet it is also rewarding. The key is in knowing what you are getting yourself into during the process.
The definition of a mortgage is best worded as a contract or an agreement between you, the home buyer, and the bank or lending institution. It is best defined as a secured loan that requires the borrower to put up something as collateral with enough value to cover the costs in mortgage default. The contract states that you can borrow up to a specific amount for a down payment on a new house or refinance your current home. If you begin to default on your payments, your lender reserves the right to repossess the property and put it back up on the market for sale or use your collateral to make up the difference.
How to Get a Mortgage
Getting a mortgage is a serious business, yet there are a few handy steps to consider when applying for one. First, what do you need to get a mortgage? Answering this question is done not with one but several key areas of focus in mind. What you need to know about getting a mortgage is that it is a process that requires a lot of financial and personal preparation.
Step One: Consider Your Finances
The first step to securing a suitable mortgage is to consider your finances. There are a few key terms to familiarize yourself with, such as debt to income ratio, which looks at your income and compares it to the total amount of debt you owe. If the numbers snug too closely together or your entire debt exceeds your annual income, then you will have a difficult time securing a mortgage for a home. But if your income is more significant than your total debt, then you can have a far better shot at getting that home loan you’ve been waiting for.
Raising your credit score to 620 or above can get you an average loan. But the higher your score, the lower your interest rates will be. Plus, it would be best if you planned on having a down payment of at least 20% for a conventional loan, plus the closing costs and fees. Another good idea is to start creating an account for your home that will cover maintenance, taxes, fees, and homeowners’ insurance.
Step Two: Choosing the Neighborhood
When buying a new home, you need to choose a good, quality neighborhood that’s safe for you and your family. This requires taking into consideration several critical factors. One is to study the region of interest and examine recent crime statistics and their impact on general safety and property values. Plus, you should check out the history of the area and the ways that homes and private property have either appreciated or depreciated. Finally, it is a good idea to get a reasonable, average price of the homes in one neighborhood and compare it to other areas in your city. This gives you an excellent view of what you can afford. It also serves as a good yardstick for determining the future value of the home you’re planning to purchase.
Factoring in the neighborhood’s local lifestyle helps determine whether or not you wish to settle down there. This includes local businesses such as restaurants or coffee shops or a local grocery store or pharmacy. In addition, the lifestyle of your neighborhood can impact property values, especially when you examine crime rates. Other issues such as walkability and access to public transportation are other factors that can help you determine where you want to buy a home. Once you’ve chosen your ideal neighborhood, it’s time for the next step.
Step Three: Choose Your Agent
Choosing a good real estate agent requires some phone calls and an extensive Google search. You need someone who can make a good deal for you and can help you negotiate a price that’s right for you. An excellent real estate agent should be resourceful enough to connect you to an attorney and help you set up an escrow account. Plus, they should have sound knowledge of the different lenders in your area and help you choose the one that’s right for you. Sheridan Solomon & Associates are here to make this process easier and are always ready to help. Feel free to give us a call anytime.
Step Four: Apply and Get Approved for a Mortgage
You may be anxious to begin looking for your dream home, but before you check it out, it’s best to apply for a mortgage loan and get approved. Once you see the loan amount you’re qualified for, then you can start your search. It would be best if you looked for a house that’s less than or equal to the amount you plan to borrow. From there, you can decide if you want a particular home or something else that falls within the appropriate price range.
Your lender and agent will run a title check to look for any outstanding liens or other issues that could cause you problems down the road. This will require a careful examination of your current finances and credit score. Again, your debt to income ratio also matters. If everything proves straightforward, then you can close on your loan and make your down payment right along with your closing costs. Once done, the realtor will hand you the keys.
Buying a home is an exciting endeavor that should also feel rewarding. However, it can be daunting to know that there are so many hoops to jump through when applying for a first-time home loan. If you have any more questions or would like to talk to one of our agents, call us at (478) 746-2000 or visit our website today to get started.