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Preparing Your Finances for Purchasing a Home

posted 3/23/2015 in Mortgage

Buying a home is not something you can do on a whim. It must be planned for. After all, you are moving into a new place to raise your family or spend your retirement, so you want to be sure it is everything you need and that the financials are taken care of correctly.

Planning for the purchase of a new home can leave you wondering where you should start. Fortunately, LSB Mortgage and the professionals at Century 21 LSB Real Estate have come up with this guide to help get you started. If you have any questions on these items, feel free to contact LSB Mortgage for help.

Crunch the Numbers

There are lot of numbers that go into determining how large a mortgage you can afford and what you ultimately end up paying for your new home:

  • Down payment- the larger down payment you make, the less of the purchase price you have to finance. You can also avoid additional payments that come with private mortgage insurance (PMI) by making a down payment of at least 20 percent.

  • Repair costs- is there anything that needs to be repaired in the home after you purchase it?

  • Fees and taxes- escrow costs, fees for multiple copies of your credit report and so on can add up. Try to get a good idea of what to expect as soon as you can.

  • Utilities- be sure to ask the current owners what they average per month in utility payments.

  • Moving Costs- renting a truck or hiring help is another cost many people forget about until it comes time to move.

  • Closing Costs- leave some wiggle room in your budget, as closing costs are often unknown until a few days or even hours before you close on your home.

Your Credit Score

Take a free look at your credit score by visiting Be sure to fix any blemishes or errors on your credit report, as a higher credit score will help you get the best interest rate on your mortgage.

Materials and Documents

Purchasing a home requires a lot of documentation, enough that it may seem like you are drowning in paperwork at times:

  • W-2s for the last two years to gauge your income

  • A month of paystubs to further assess your income level

  • Investment statements to help the lender determine the diversity of your money and any other avenues to pay for your home

  • A list of all debts with balances, interest rates, monthly payments and terms if applicable

  • Multiple forms of ID, such as your driver’s license, social security card and/or passport. Make copies of these as you will most likely have to provide them numerous times.

To be sure about all documentation, contact your loan advisor as they will have a better idea about all the paperwork you will need.

Keep Things Steady

Now is not the time to be making any large purchases. Keep your spending in check during this time, saving what you can and remaining constant on everything else. This will help provide a more consistent picture of your finances to lenders.

Expect and Prepare for Surprises

You most likely won’t know about every fee and cost until the last minute, so be sure to create some room in your budget for those.

No two people’s home buying journeys are the same, so be sure to work with real estate experts like those at LSB Mortgage who take the time to listen to your unique needs. Visit for more information about how we can help you find the home of your dreams.

Lincoln Savings Bank, member FDIC, Equal Housing Lender

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