7 PERSONAL FINANCE QUESTIONS TO ASK YOURSELF BEFORE GETTING A MORTGAGE DR. TERESA R. MARTIN
4. Do you have the necessary financial
paperwork? Mortgage applications require a great
amount of paperwork. Lenders can ask for old tax
statements, check stubs, savings account statements,
and other information.
• If you have a high credit score, you
may get a no documentation loan.
• It’s rare to get a no documentation
loan, so it’s better to be prepared by checking your files and collecting the financial papers you
may need.
5. Did you calculate the hidden expenses of owning a home? Home ownership comes with multiple
expenses that go beyond appraisal fees, property taxes, mortgage closing costs, and insurance.
• One of the hidden expenses of moving to a home is more bills. If you’re used to renting, then
home ownership can change your monthly bills by adding new ones. You’ll add trash collection,
water, recycling and sewage in most locations to the expense list.
• Home insurance is higher than renter’s insurance. In addition, older homes cost more.
• Homeowners' association fees are becoming more common in neighborhoods. You may be aware
of condominium association fees, but are you ready to pay homeowners’ fees?
6. Do you have an emergency fund? Emergencies can vary from broken dryers to flooded patios, so you
need to be ready for anything.
Is your emergency fund big
enough to handle common,
unplanned expenses?
• Emergency funds are a
better option than credit
cards or loans. Putting
enough money aside can
help you avoid new debt.