Factors that Impact the St. Louis Home Buying Process
Purchasing a St. Louis home is no small feat. The St. Louis home buying process requires a significant amount of financial planning and research. If you are considering heading down this path, consider the following factors that will impact your St. Louis home buying process.
Financial Standing
Where do you stand financially? Before you begin the process of trying to purchase a St. Louis home, make sure it would be possible for you and your lifestyle. Can you afford this cost and the resulting maintenance fees that come with owning a home? Don’t forget about the annual taxes and insurance you will be responsible for.
Talk to a professional to see what you can afford or at least use an online calculator to see where you stand.
Mortgage Options
Remember, when you apply for a mortgage you will have a few options that you should explore with a professional to find what is best for you.
Fixed-Rate
With a fixed-rate mortgage, the interest rate stays the same throughout the life of the loan. Payments are divided into equal amounts split into monthly payments. A longer loan lessens the amount you pay each month.
The downside is that you will pay more in interest for this than a shorter-term loan.
Adjustable-Rate
Also called an ARM, this mortgage has a fixed rate for an initial period, and then the lender may adjust the interest rate. You need to make sure you will be able to afford the payment if the interest rate increases.
What is Your Credit Score
Before you begin the St. Louis home buying process, you need to know your credit score. Your credit score is what will help lenders determine whether you are qualified for a mortgage, and if so what mortgages and interest rates you qualify for. If you want the best deal on your mortgage, you should shoot for a credit score of 740 or above.
Less than perfect credit doesn’t necessarily mean you will not qualify for any mortgage. However, you may have to settle for a higher interest rate which will cost you more per month and much more over the life of your loan.
This doesn’t mean every low score can qualify for a mortgage, but don’t give up just because you have a low credit score. But if your credit score is very low you may want to work on improving it before you apply for a loan.
Budget
You need to know what price range you are looking in when searching for St. Louis homes. The more expensive the homes you are looking at, the more you can expect to pay monthly.
Make sure you are realistic with what you are looking for in a St. Louis home. You will usually have to sacrifice some of your “wants” in order to get all of your “needs.”
Down Payment
A large down payment is very helpful in helping you qualify for mortgages, gaining lower interest rates, and in reducing your monthly payments. A suggested down payment of 20 percent or more also allows you to skip paying private mortgage insurance.