THE COST OF HOME OWNERSHIP

Determine the Total Cost of Buying a Home

Make yourself a checklist using the following elements and enter the dollar value of each element. Add any elements that are unique to your situation as well, such as real estate brokerage fees. Your loan officer and real estate agent might be able to specify other expenses common in your area.

Purchase Price	Loan Amount	Loan Term in Years
Interest Rate	Discount Points	Origination Fee
Lender Fees	Credit Report	Escrow Fee
Lender's Title Insurance	Recording Fee	Appraisal Report
Survey Fee	Inspections	Annual Property Taxes
City, County & State Taxes	Annual Homeowner's Association Dues	Annual Homeowner's Insurance Policy

Monthly Mortgage Payments

Your monthly mortgage payment consists of the famous PITI -- principal, interest, insurance and taxes. The insurance in this equation is PMI (private mortgage insurance) rather than homeowner's insurance, and you may not need PMI if your down payment is 20% or more.

Your Credit Report

Why your credit report is so important Lenders are in business and they evaluate your request for a mortgage in light of the risk they take by funding your mortgage. In particular, lenders look at these aspects of your credit record:

• Delinquent Payments. If you have failed to make payments in the past, or if you have been late making payments, lenders expect you to act similarly in the future.

• Past Credit Usage. If you are close to the limit on a credit card, you are considered a greater risk than someone who has lots of credit available.

• How Long You Have Used Credit. The most-used scoring system assumes that you are a better risk if you have been using credit wisely for a number of years.

• How Often You Apply for New Credit. It's not a good signal if you have applied for many new credit cards or other loans within a short period of time. A lender evaluating your credit worthiness does not like to see a lot of new indebtedness right before you apply for a mortgage.

• Your Credit Mix. Credit card accounts, car loans, student loans and revolving credit accounts all concern lenders when evaluating credit risk.

Other Factors Considered By a Lender

The stability of your job and the price of the house are major factors in the equation. Your ability to make your down payment and cover closing costs also is evaluated. If your credit score and other aspects of your file meet or exceed what the lender expects, loan approval can be almost automatic, considerably speeding up the closing process. That is one reason why credit scores are so important in the mortgage industry -- the more they process can be objective, the faster and more efficient the process becomes. Ultimately, that translates into less cost to you, the consumer.

LEARN HOW TO DETERMINE THE COST OF BUYING A HOME FROM AN EXPERIENCED MORTGAGE BROKER. CALL 866-700-4290 FOR MORTGAGE PAYMENT ADVICE FROM A WEST VIRGINIA MORTGAGE PROFESSIONAL

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