Financing

Finance Information for Enterprise Real Estate

The steps to successful financing

Before you start on the road towards owning real estate get your finances in order and start out on the right foot.

Get pre-approved.

This is different than pre-qualification. Getting in writing a pre-approval letter together with a strong offer will show sellers you are serious in buying their home and have done proper homework to set yourself up for it.

Examine your finances.

How much can you afford to spend? While a lender will tell you how much you qualify for, it's up to you to figure how big a payment fits into your budget. What monthly dollar amount do you feel comfortable committing to? In addition to the payment remember that you will also have to pay the interest, insurance and taxes. These amounts can be combined into your loan payment.

Discuss with your lender the different types of loans and interest rates. Feel free to shop around for the lowest fees and rates. Each lender will have varying costs for the following:

• Interest rates
• Broker fees
• Points (each point is one percent of the amount you borrow)
• Prepayment penalties
• Loan term application fees
• Credit report fees
• Appraisal costs

Check your Credit Report. A lender can obtain several of these for you to go over and check before applying for a loan to buy a home. 

Be aware. Don't let hidden costs sneak up on you. Ask your lender for a written estimate. So many of the people dealing with Enterprise foreclosures right now are because they didn't understand what type of loan they were getting into.

Apply for a loan.

Gather all the documents you'll need to verify your loan application. Lenders will want to know your job tenure, employment stability, income, assets (property, cars, bank accounts and investments) and your liabilities (auto loans, mortgages, installment loans, credit-card debt, household expenses and others).

You'll need to provide documents such as paycheck stubs, bank account statements and tax returns. Check with your lender or broker for more information.

Ask about Pre-payment. You can shave years off the length of your mortgage by restructuring the way you pay back your loan. Simply paying more frequently can save thousands in interest. So can making a lump payment toward the principle - or paying a little more each month. These methods are called pre-payment.

Not all loans allow for pre-payment. If you want the option, discuss it with your lender or broker.

Clear up any financial problems. Do you have credit problems or owe money to the IRS? Buying a new home may still be a possiblity. Contact a financial advisor or tax resolution service to find solutions.

Talk to Christina Hunt with any issues you may have with your credit. And feel free to contact me anytime for financing your Enterprise AL real estate.

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