December 29, 2020
Are you thinking about your first home loan for 2021? Are you considering your options for your very first refinance loan? There are some important resources you should know about that can help you in the planning stages.
Know Your FHA Loan Limits
If you don’t know what the FHA loan limits are for your county for 2021, you can look at the FHA.gov official site, but you can also look at home loan websites to view both the rundown of 2021 home loan guaranty limits but also get information in getting pre-qualified, etc.
When exploring your area FHA loan limits, don’t forget that the limits increase if you purchase a multi-unit property. The single-unit FHA loan limit is lower than the four-unit FHA loan limit and borrowers are permitted to apply for loans to purchase property with as many as four living units.
Know Your Neighborhoods
Where do you plan on looking for a new home? Real Estate marketplaces like Zillow and other resources can help you research neighborhoods you might want to live in.
Learn The Lingo
When you enter the world of home loans and real estate for the first time, you’ll encounter much jargon, industry-speak, etc. You can get information on the definition of terms such as title insurance, appraisals, or home inspections–which are NOT the same as appraisals no matter how many times lenders and real estate people call them “inspections” when they mean “appraisals”.
You can learn mortgage jargon at websites including Investopedia.com or the Consumer Financial Protection Bureau.
Know Your Credit Score
You can get credit score information from a variety of sources but knowing your scores won’t be enough. Consider investing in a credit monitoring subscription service to stay informed as early as possible when changes to your credit report happen. Remember, it’s not just FICO scores your lender reviews when you submit your loan application. Know the contents of your credit report and monitor it while planning your loan.
Know Your Ability To Borrow
Use an online mortgage calculator to estimate your monthly payment and other variables associated with your home loan.
Save Money The Right Way
There is a right way and a wrong way to approach the planning and saving stages for your home loan. Many borrowers don’t realize they may be able to save money in certain areas of their mortgage by getting down payment assistance or seller contributions toward closing costs. What this means is that you could find yourself saving up money for items or expenses that could be paid for another way.
Get some financial counseling for first-time home buyers by calling the FHA at its toll-free number (1-800 CALL FHA) and ask for a referral to a local, HUD approved housing counselor who can give you advice on loan prep and planning.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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