When shopping for a home, it can be exciting to hear how much a bank is willing to lend you. But homeowners, especially first-time homebuyers, need to be cautious about maxing out that loan. NBR asked several financial planners their opinions and advice on how to wisely go into purchasing a home.
Lenders have recently introduced programs that will make it easier for creditworthy borrowers to buy a home with very little down even as they juggle other demands, like student loan repayment or starting a family.
Banks have partnered with Fannie Mae and Freddie Mac, two entities that provide financing to lenders, to make mortgages available to first-time buyers with a down payment that’s as low as 3 percent. For instance, Wells Fargo launched “yourFirstMortgage” in late May. Similar programs are available at SunTrust and Bank of America. Quicken Loans offers a mortgage with a down payment option of just 1 percent.
“People need to look ahead and not commit to big housing costs,” said Kristin C. Sullivan, a certified financial planner with Sullivan Financial Planning in Denver….