Looking to Buy a New Home in 2016? Follow These Easy Steps!

1. Improve your creditworthiness Your credit profile is important to a lender. While you're preparing to buy a home, be sure you're responsibly managing your current debt. Always pay your bills on time and chip away at your outstanding balances by paying more than the minimum. In most cases, lenders like to see a borrower with a debt-to-income ratio of 36% or less. 2. Save for a down payment Although a 20% down payment on a mortgage is ideal, it's not mandatory. Many lenders expect buyers to put down at least 3%, aside from the Federal Housing Administration, which requires a 3.5% down payment. However, if you're interested in building sizable equity right away, stash a hefty amount of cash to take to the closing table. Additionally, do your due diligence to find out about any local down payment assistance programs. 3. Seek preapproval Before you rush into house-hunting mode, get a mortgage preapproval. This process is used to help determine how much money you're qualified to borrow for a home purchase. Once you're preapproved, you'll have a more realistic expectation of which for-sale houses fall within your budget. You may qualify for a loan that is roughly 3 times your gross annual income. 4. Shop for a lender The home buying process involves more than just chasing a favorable interest rate. You have to find the best mortgage lender for your financial situation. No two sets of lender fees are alike, so it's important to get loan estimates from multiple lenders before making a decision. But the most important thing is realizing that individual brokers will provide you and your family with a more personal service, whereas most banks do not have a lot of the extra time to do so. Check out our website and get access to a personal loan officer who can answer your questions. 5. Research loan types A fixed-rate mortgage isn't right for every homebuyer. Neither is an adjustable-rate mortgage. If you plan to stay put in a home to raise a family, you might consider a 30-year loan. Conversely, if you're moving in 10 years or less, an adjustable-rate mortgage, or ARM, could better suit you. Interest rates on ARMs are fixed for the first several years of the loan and often start out lower than rates on 30-year fixed loans. There are also jumbo loans, which are typically used to purchase luxury homes. 6. Consider your lifestyle When you purchase a home, you're also investing in the community that surrounds it. More importantly, your home becomes central to every other aspect of your life. As you shop for homes, consider your work commute, nearby schools and any extracurricular activities in which you and your family might participate. 7. Remember to budget Your monthly mortgage payment won't be the only expense you have as a homeowner. There's also homeowners insurance, property taxes, maintenance costs and, more than likely, homeowners association fees, which is why it's necessary to stick to a budget. See what you can afford here. 8. Consult a professional The homebuying process is a challenging one, which is why it helps to have the assistance of qualified professionals. Ask questions of your lender and real estate agent, and reach out to a local lender who is qualified and has expertise in the area you are looking to buy in. Visit us at www.txpremiermortgage.com. 9. Don't forget the closing costs Not only do you need a solid down payment for a home purchase, you'll have to pay closing costs. The loan estimate you receive after applying for a mortgage gives you an idea of the "cash to close," or the money you need to complete the transaction. There are some closing costs for which you can shop and save money, and others that are fixed. 10. Beef up your savings account It's unwise to drain your savings to fund your down payment or closing costs and leave nothing in the account to cover emergencies. A useful rule of thumb is to stockpile 3 to 6 months' worth of living expenses. This deters you from tapping credit cards or loans and amassing more debt. Last but not least, be sure to make 2016 a great year and start it off with experiencing our A+ red carpet service which we provide to all of our clients! We would enjoy helping you and your family be able to make your new home dreams come true!