financial planning for buying a house

A Guide to Financial Planning for Buying a House

Buying a new home is an exciting time, but it’s also a potentially stressful endeavor for buyers and sellers alike. Being fully prepared could make the process smoother, helping you settle down in that new home much sooner.

Are you looking at homes in Arizona or California? Altitude Home Loans is one of the best mortgage lenders in Tucson, Arizona, and beyond. When it comes to financial planning for buying a house in this area, our specialists have the guidance you need for a fast closing, including a few vital steps discussed below.

Monitoring Your Credit Score Pays For Itself

Why look into boosting your credit score? A higher score is always beneficial, particularly when buying a house. Credit scores determine your options for interest rates, so maximizing it pays dividends.

Take a careful look at your spending habits and develop a plan for improving your score by establishing a budget and cutting unnecessary costs. The higher you get your credit score, the lower your mortgage’s interest rate should be.

Saving For a Down Payment Opens Up Your Home-Buying Options

Having a hefty down payment widens your mortgage options considerably. Typically, a down payment of at least 20% will help you avoid needing private mortgage insurance. PMI keeps the mortgage company safe if you default on your loan, but it costs anywhere from 0.05% to 1% of your total loan (until your equity reaches 20%), which is a major cost.

Gathering All the Necessary Paperwork Saves Time

Buying a home always involves a stack of paperwork. Having it all ready long before starting the process makes the entire process less stressful. 

Gather the following documentation as a start:

  • Two recent state and federal tax returns
  • Two months of pay stubs
  • Two months of bank statements
  • A list of all current debts

Once you’ve got all the necessary paperwork, create an organized file so that you’re ready for your mortgage lender.

Considering All the Expenses Unburdens Decision-Making

Another step during financial planning for buying a house is adequately considering your future commitments. Owning a home comes with a long list of expenses, from the initial closing costs to yearly property taxes and maintenance.

One solution would be to establish a savings account for ongoing expenses and another one for emergency home-related expenses to ease the burden of these costs long-term.

Getting Pre-Qualification or Pre-Approval Accelerates Things

Pre-qualification is a fast process that gives you an estimate of the home you can afford. The process uses self-reported income, debts, and a mortgage calculator for a realistic idea of your price range.

Note that pre-approval is a separate process. Your lender reviews verifiable financial documents before determining how much they’re willing to give you. Having the paperwork ready that we mentioned earlier helps.

Financial Planning Assistance with Altitude Home Loans—Arizona

If you’re buying a house in the Tucson area, Altitude Home Loans make it a smooth, speedy transaction for you. Financial planning for buying a house is easier with proven mortgage process steps and experts on hand. So, get into the home of your dreams—call 520-500-1010 today.


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