When considering whether to buy a home, the American Bankers Association recommends that you:

  • Do your homework. With so many options from zero percent down to 20 percent down, adjustable rates, interest only and traditional mortgage financing packages, no matter what you're looking for, it's probably out there. Work with your lender to find the best fit for your needs.
  • Consider all the costs. This includes fees, closing costs, points, homeownership insurance, etc, which your lender will go over with you. Keep in mind that you should also consider the cost of repairs and maintenance. Remember, when you own a home, there isn't a landlord to come over and fix any problem - you'll have to bear those additional costs on your own.
  • Organize your finances before you go to the bank. You will need to provide information to the bank in order to have them consider your request. At a minimum, you will need:
    1. Pay stubs (two recent)
    2. Tax returns (last two with W-2 forms)
    3. Financial statements (one that is less than 60 days old)
    4. Copies of additional monthly payments such as car loans, credit cards, etc.
    5. Any additional information that you think will help your banker to positively evaluate your credit request.
  • Pay off or pay down other loans. Credit cards, auto loans or other small loans should be paid off or paid down before you look for a mortgage. This will help increase your credit score and help qualify you for a larger mortgage or lower interest rates.
  • A mortgage loan may be used to pay off high interest debt. Provide the bank with a list of the debt to be satisfied. Include creditor's name, account numbers and amounts.
  • Plan for the future. A home is a long-term investment, but if you plan on being in an area only a short time, renting may be a better option. Typically, if you plan on staying in one area less than 5 years, buying a home may not be worth the investment. Instead, focus on paying down debt.

The American Bankers Association brings together all categories of banking institutions to best represent the interests of this rapidly changing industry. Its membership - which includes community, regional and money center banks and holding companies, as well as savings associations, trust companies and savings banks - makes the American Bankers Association the largest banking trade association in the country.

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