(StatePoint) When searching for a new home, you may come across some conflicting information, especially about home financing or mortgage loans. Consider these six money tips to help you navigate the process.
• Know your credit profile: Your credit score may impact the interest rate or the amount of money you can borrow. Once a year, you may obtain a free copy of your credit report from each of the three credit bureaus at annualcreditreport.com, the official site for free annual reports.
Having great credit is certainly helpful, but not required. Homebuyer education and home loan financing programs are making it easier for homebuyers with a range of credit scores or limited credit history to obtain a loan. Find more tips and free education resources at wellsfargo.com/financial-education.
• Manage debt: Another important factor mortgage lenders evaluate is debt-to-income ratio. A good rule of thumb is to keep your total debt level (taking into account the potential new mortgage payment) at or below 36 percent of your gross monthly income. Use an online debt-to-income calculator, like the one found at wellsfargo.com/goals-credit/debt-to-income-calculator.
• Show them the money: A Wells Fargo survey found that more than a third of people believe you need 20 percent of the home purchase price to make a down payment. The reality is, some home financing or mortgage programs allow qualified homebuyers to put down as little as 3 percent. And for those who qualify for special mortgage programs – like military veterans or those purchasing rural properties, a down payment may not be required at all. You may also be allowed to use monetary gifts from family or friends for all or part of the down payment. In addition, certain community programs offer down payment assistance, like the Wells Fargo NeighborhoodLIFT program.
Keep in mind, some low down payment programs may require private mortgage insurance, which adds to the monthly payment and overall loan cost. You’ll need to add that into your debt-to-income consideration.
• Demonstrate proof of income: Home mortgage financing programs are available for a range of incomes. The key is demonstrating your ability to repay the loan. Lenders will review your income history and require current W2s, tax returns or similar documentation.
• Have a rainy-day fund: Lenders want to see that you have savings or a cushion to handle unexpected expenses that come with homeownership, such as a leaky roof or failing appliance.
• Get pre-approved: Getting pre-approved is a good way to understand what kind of home loan product or program you may qualify for. Digital services are streamlining the process considerably. For example, Wells Fargo Home Lending’s online mortgage application prefills contact and financial information for existing customers. With a few clicks, any user can upload income, payroll and tax information.
“Our intuitive, mobile-ready technology offers homebuyers choices in how they engage in the mortgage application process. Consumers have the option to complete an application online, and still have the opportunity to speak with a home mortgage consultant if they have questions. In many cases, house hunters can actually be pre-approved immediately,” says Liz Bryant, national sales manager for Wells Fargo Home Mortgage. “Digital services give prospective homebuyers the ability to navigate their mortgage application where and when they choose - relieving some of the pressure of making timely decisions.”
If you’re interested in starting an application for a home mortgage or refinancing an existing property, visit wellsfargo.com/mortgage.
For a smooth home-buying experience, it’s important to know your options, use programs designed to help you, and access services that streamline decision-making.
(StatePoint) Savvy homeowners know that with cool weather, comes a bit of preparation. A quick audit of your heating equipment can mean less wasted energy, a more comfortable home and lower energy bills.
Nearly half of all heating and cooling equipment in U.S. homes never performs to its advertised capacity and efficiency due to incorrect installation, according to U.S. government estimates. And if you have an older system that was built before current efficiency standards, you could be spending more than needed on heating your home.
If it’s time to replace your system, be sure to have it properly installed by an HVACR professional, certified by North American Technician Excellence (NATE), the nation’s largest nonprofit certification body for HVACR technicians. NATE-certified technicians are skilled professionals who have proven their knowledge in the HVACR industry by passing specialized certification tests.
“The NATE-certified techs who perform maintenance and repairs do a consistently great job. We never have any concerns if the job is done right,” says Rob Kirkpatrick, a longstanding customer of Thermal Services, a Nebraska-based contractor.
Beyond having an efficient heating system properly installed, you can prepare for the season in the following ways:
• Clean heating filters. Check them every couple of weeks and change them at least twice in the season, or as directed by the manufacturer.
• Check and maintain insulation. Improperly insulated walls, floors, attics, basements and crawlspaces drain away heat and can also lead to moisture imbalance. Adding weather stripping and caulk around windows and doors can also improve a home’s insulation.
• Turn down the thermostat or install a programmable thermostat to regulate temperature.
• Clean the furnace area. Don’t keep chemicals or cleaning products near a heater, and don’t store anything next to it that could impede ventilation.
• Free all vents and returns of obstructions. Don’t lay carpet over vents, place furniture over or in front of them, or obstruct the flow of air.
• Dry air feels cooler than moist air, so install a humidifier. A simple humidifier may make the home feel five degrees warmer than a home with dry air.
• Look into geothermal heating systems which use earth’s natural heat and are among the most efficient and energy-conserving heating and cooling technologies currently available.
• For optimal performance of your HVAC system, get an annual service contract which includes both heating and cooling maintenance. But take care to avoid poor service and scams. To find a qualified local contractor who employs certified HVACR professionals, look for the NATE logo or go to www.natex.org.
By incorporating a few energy-friendly habits into your routine and by making sure your heating system is operating optimally, this season, you can keep utility bills low while maintaining a cozy, comfortable home.
Six money tips for buying a home
Is your heating system ready for cool weather?