So you're ready to buy a home, but are you armed with the knowledge you
need? Do you know about credit score requirements? Are you familiar
with flexible standards on Federal Housing Administration loans?
you're a first-time homebuyer or an experienced owner, buying a house
requires a checklist that will make things much easier.
is a 6 item list, including tips on two types of savings you need,
plus advice about what's more important than buying a house for its
your credit score "It's
a brave, new world with respect to credit requirements for
mortgages," says John Ulzheimer, president of consumer education
at smartcredit.com and formerly of FICO, which pioneered credit
scoring. One old rule still applies: The higher your credit score,
the lower your down payment and monthly payments. Improve your
chances by: pulling your credit reports and ensuring you're not being
unfairly penalized for old, paid or settled debts. Stop applying for
new credit a year before you apply for financing. And keep the
moratorium in place until after you close on your home. We can pair
you with an experienced lender to help you determine the amount of
house you can afford. They can even help you rebuild your credit.
Shoot me an email me at [email protected]
or call 615-995-9986. I'll have a trusted lender get in touch with
you immediately. Figure
out how much house you can afford
buyer's mantra: Get a home that's financially comfortable. There are
various rules of thumb that will help you get an idea of how much
home you can afford. If you're using FHA financing, as almost
one-fifth of buyers get FHA-insured loans, your home payment can't
exceed 31% of your monthly income. But, with some mitigating factors,
FHA will let you go higher. For conventional loans, a safe formula is
that home expenses should not exceed 28% of your gross monthly
income, says Susan Tiffany, director of consumer periodicals for the
Credit Union National Association. Before you home shop, calculate
the mortgage payment for the home in your intended price range, along
with the increased expenses (such as taxes, insurance and utilities).
for down payment Depending
on your credit and financing, you'll typically need to save enough
money to put anywhere from 3.5% to 20% down. Rural Development loans
are also available on certain homes and they require no down payment.
If you're using FHA financing, then you need a score of 500 or
higher. And in the 500 to 579 range, if you can find a lender, you'll
have to put 10% down instead of 3.5%. One exception: Veterans Affairs
loans, which require no down payment. Improve your chances by: Along
with banking your own money, search out down payment assistance,
Tiffany says. Often it's location-based or tagged to a certain type
of buyer, like first-timers, she says. So do an Internet search with
the city name, then the county name, along with word combinations
such as "down payment assistance," "first-time
homebuyers" and "homebuyer's assistance." We can help
you with finding assistance! We can also negotiate to have the seller
pay a portion or all of the closing costs.
a healthy savings account
is over and above your money for the down payment. Your lender wants
to see that you're not living paycheck to paycheck. If you have three
to five months' worth of mortgage payments set aside, that makes you
a much better loan candidate. And some lenders and backers, like the
FHA, will give you a little more latitude on other factors if they
see that you save a cash cushion. That money will also help you with
maintenance and repair issues that come up when you own a home. While
repairs are sporadic, items such as a new roof, water heater or other
big-ticket items can hit suddenly and hard. Improve your chances by:
setting aside money every month. A good rule of thumb: on average
you'll spend 2.5% to 3% of your home's value annually on upkeep,
repairs and maintenance, says Joseph Gyourko, chairman of the real
estate department at the Wharton School of the University of
Pennsylvania. If you're buying a $250,000 home, aim to bank $520 to
$625 per month.
preapproved for a mortgage
serious home shoppers, "the No. 1 thing is they better have
everything in order," says Dick Gaylord, past president of the
National Association of Realtors. That means that, before the real
home shopping begins, you want to get financing in place, he says.
And the preapproval process is "much more extensive" than
it was a few years ago, he says. “That documentation around income
and assets is very essential, more so than in the last five years,"
he says. Improve your chances by: getting financing in place "before
you walk through the first house.” Otherwise, he says, "How do
you know how much you can afford?" We specialize in helping you
figure out how much house you can afford before we go out shopping.
a house you like
you're buying today for yourself and your family, you want a home
that will make you happy for the next few years. Depending on how
much you put down, and how much you have to shell out to sell and
relocate, short-term ownership can be a pretty expensive proposition.
Our goal is to put you in a house you LOVE!!!
Parts of this article by Dana Dratch
Author:Joe Petno Team Phone: 615-566-4663 Dated: February 12th 2014 Views: 6,286 About Joe: ...
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