CENTURY 21 Affiliated Buyer's Guide

FINANCING YOUR HOME There are three crucial financial elements involved with purchasing a home:

DOWN PAYMENT — This is how much you will pay up front. The more you pay outright, the smaller your mortgage can be. The standard down payment is 20% of the cost of the home, but there are other programs available especially for first-time homebuyers. Your CENTURY 21 Affiliated Agent and a mortgage broker can help you investigate first-time homebuyer opportunities, including Federal Housing Administration, Veteran Affairs, and other programs to advise you of the best fit for your situation. CLOSING COSTS — The cost of attorneys, appraisals, title insurance, inspections, and title transfers can add up. Your CENTURY 21 Affiliated Agent will help you estimate these costs to minimize surprises. MORTGAGE AND ESCROW — Your mortgage is a loan and carries with it an interest rate, dictated by the mortgage market, your credit score, and the loan-to-value ratio of the home. Escrow deposits are monthly payments collected by your mortgage lender to pay the costs of things such as hazard insurance, private mortgage insurance (if applicable) and property taxes. Escrow deposits are usually combined with your monthly mortgage payment. The Importance of Your Credit Score A buyer’s credit score, which is a number lenders use to estimate risk, is a determining factor when applying for a mortgage. Experience has shown that borrowers with higher credit scores are less likely to default on loans, therefore, lenders tend to attract them by offering better interest rates and loan programs. Lenders determine your credit score by plugging data from your credit report into their software for analysis. That’s why it is important to make sure the information on your credit report is accurate. It is recommended that you verify the accuracy of your credit report annually and address any inaccuracies immediately. Talk with your mortgage broker about the frequency and timing of pulling your credit report. Pulling your credit report frequently may negatively impact your overall rating.

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