As more Americans consider returning to the home-buying market, many are looking for tips to simplify the process.
Mortgage lenders say prospective home buyers should plan ahead, understand the available loan options and determine what they can reasonably afford. Lenders offer the following advice:
• Determine where homeownership fits into larger financial plans.
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• Prioritize homeownership among any other financial goals.
• Sit down with a bank loan officer to discuss financial readiness for homeownership.
• Meet with a real estate professional to discuss listings in the area.
• Build a cash reserve by setting up a special savings account earmarked for a down payment.
• Manage debt. Credit scores can affect the interest rate that is paid on a mortgage and the type of loan a borrower can qualify for.
• Understand the mortgage before signing any contracts.
To help its borrowers understand the terms of their loan, Bank of America Home Loans has begun offering the Clarity Commitment a one-page loan summary, including terms and information about closing costs, written in plain language.
“The move represents our pledge to lend responsibly and to help customers be successful homeowners,” says Matt Vernon, enterprise sales executive at the bank, which now originates and services one out of every five home loans in the United States.
For more information
Prospective home buyers can participate in a personalized interactive simulation of the home loan process as part of the Bank of America Home Loan Guide (available at bankofamerica.com/home loans), a new tool that helps consumers understand the criteria that drive lenders’ decisions, steps they can take to be more successful in the search for the right home loan, and how a home loan fits into their budget and total financial picture.
Online tools, borrower education and easy-to-understand loans can help home buyers make responsible financial decisions.