Buying A Home

imagesBuying a home is a big financial decision, but with the right preparation and advice, the process can be as smooth as possible. Deciding where you wish to relocate, when you wish to move – all of these are big endeavors. We can will asses your personal needs for your new home early on, ensuring that you will be happy and content in the long term.

Of course, when it comes to buying a home in our specialized area, Central Florida, you can’t go wrong! With beautiful properties on offer, year round sunshine, a stable local economy and great local amenities it is hard to see why you wouldn’t want to live here!

Below are a few key factors to keep in mind when evaluating your ability to purchase a home –

Your Work History
  • Have you been steadily employed for the last two years?
  • If you have recent gaps in your employment history, what caused them?
  • If you changed jobs, did your pay match or exceed the pay from your old job?
  • Has you income fluctuated during the last two years? Why?
Your Credit History
  • Do you pay your bills on time?
  • Do you carry large balances on your credit cards?
  • Have you ever defaulted on a loan (including your student loans)?
  • What do your credit reports say?
  • Are your credit reports accurate?
  • Are there items on your reports that a lender might deem unfavorable to you?
  • If you currently have loans you owe, do you send in the monthly payments?
  • If you have long-term loans, how long do you have to pay them off?
  • Do you pay your rent on time?
  • Have you every had property repossessed?
  • Have you ever had a bank foreclose on your house?
  • Have you ever had a creditor turn your account over to a collection agency?
  • Has a court entered a money judgment against you that you haven’t paid?
  • Have you ever filed a bankruptcy petition? How long ago?
Saving Money

Have you been saving money for your down payment and closing costs?

Tips:

  • The down payment usually is at least 5% of the price of the house you want to buy.
  • You could save your money in a financial account that pays more in interest than a regular savings account and your money will grow faster.
  • Your employer may have direct-deposit options for you, and you could designate a set percentage of your check to be deposited directly into your down-payment account every time you get paid.
How Much Can You Afford?

Lenders have legal limits on how much money they can lend you, so you need to have a good understanding of where your dream home fits within those limits. The amount a lender can lend for a mortgage depends on how much you earn and how much you spend each month. Lenders look at the total amount you pay for housing each month, add costs like property tax, insurance premiums, and any homeowners’ association fees, and compare it to your monthly gross income. They generally try to keep the amount of the loan low enough so your monthly housing costs do not exceed roughly one quarter to one-third of your monthly gross income.

Lenders also look at your other long-term debts, such as your car loan, student loans, credit-card debt, and so on, to get a general overview of your monthly financial obligations. They add these monthly costs to your monthly housing cost, and compare the total against your gross monthly income. These two kinds of costs taken together should not exceed roughly one third  to two fifths of your gross monthly income.

If your gross monthly income and your debts exceed these two guidelines, you may need to adjust your short term expectations. You will need to decide whether to wait until your cash flow changes, or when your savings are larger, or whether you should set your sights on a lower-priced house. But as always you can work with a lender to see what they can do for you. Talk with a knowledgeable loan officer for the most current advice of what is available in the home loan market.

Getting Pre-qualified for a Loan

A smart buyer starts shopping for a loan before he or she starts looking for a house, and certainly before making any offers! Being pre-qualified means that a lender has looked at your finances and credit history and has decided that you can get a loan, and how much you can borrow. When you’re pre-qualified, you may speed your search for your home because you will be able to focus on homes in your price range. What’s more, most sellers these days expect you to be pre-qualified or pre-approved for a mortgage when you submit an offer on their home. When it comes to purchasing bank owned properties this is especially true.

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