April 6, 2023
Are you thinking about applying for a mortgage loan? Here are some important questions you should ask yourself before starting a loan application. Preparing for the issues raised below can help you get off to a good start.
Have I Saved Enough For Contingencies?
There are plenty of costs some borrowers do not anticipate when planning and saving for their FHA mortgage. You should expect title transfer fees, pest inspection costs, and home inspection fees.
These are all standard costs associated with buying a home. But there are also fees that are easy to forget about. Will you have to pay any property taxes at closing time?
What about compliance inspection that may be needed after appraisal-required corrections are made as a condition of loan approval?
How Much Negotiating Can I Afford?
If you can afford a $200,000 home, could your budget stretch for a $220,000 home? Some borrowers may be financially able to handle the increase, and some may not.
Deciding which applies to you ahead of actually trying to negotiate will help you a great deal. Knowing how much is too much is an important factor in negotiations. Draw your “line in the sand” so to speak in advance and you will negotiate with more confidence.
How high can the home sale price go before you have to drop out of the negotiation?
FHA Home Loan Deal-Breakers
Some issues that might make you think twice about a conventional loan don’t apply to FHA mortgages.
For example. FHA home loans have protections for the consumer such as forbidding a penalty for early payoff of the loan. FHA mortgages also let you walk away (without penalty) in cases where a house appraises lower than the asking price.
But some things are deal breakers no matter what kind of loan you apply for. Some will walk if the house feels too close to a major shopping center. Others will reject a home because it is too small for their future family.
Is the home too far from essential services like daycare or grade schools? All good questions to ask before you agree to purchase.
How Old Are the Major Features Of The Home?
How old is the roof? Does it need to be replaced sooner rather than later? That is a financial burden some are not ready for in the early days of home ownership.
Be sure to ask about the age of the appliances, the water heater, air conditioning, and even the plumbing. Knowing your potential future expenses with the home you want to buy may change how you feel about agreeing to purchase it.
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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