Home Buyers

 “He is able who thinks he is able.” – Buddha


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Suze Orman - Real estate quote

Whether you are a first time buyer or a seasoned buyer/investor, I can help. I’m here to help when you are ready!

  1. What are the benefits of homeownership?

Homeownership brings many benefits. When you buy your first home, you’ll become part of a community and experience the security of owning the roof over your head.

As a homeowner, you may also be able to:

  • Take control. Avoid rent increases and cancelled leases while creating a home that meets your needs and tastes.
  • Build home equity. Grow your assets with the principal portion of your mortgage payments as your property value potentially increases.
  • Get tax benefits. Deduct mortgage interest and real estate property taxes on your income tax returns. (Consult a tax advisor regarding the deductibility of interest).
  • Build your credit. Create a strong credit history by making on-time mortgage payments.

2.  What should I consider before buying a home?

Homeownership is a serious and long-term commitment: financially, geographically, emotionally, and more.

Give careful thought to these factors as well:

  • Financial responsibility. You’ll need to pay for utilities, maintenance, and repairs — on top of your mortgage payments, property taxes, and homeowners insurance.
  • Potential risk. Real estate often increases in value over time, but not always. Your property value can also go down.
  • Tighter ties. As a renter, you can pick up and move with short notice. When you own a home, selling it before moving on is more complicated.

3.  How can I get started with home buying?

Knowledge of the area where the property is located, as well as an understanding of the financial considerations that go along with buying a home can increase your chances for a successful start. Here are some steps you can take to get started.

Create a financial plan

Understand your credit needs and borrowing ability.

  • Check your credit history and make a plan to get your credit in shape if necessary.
  • Determine how much you can put toward a new home. The total amount you need is the sum of your down payment and closing costs.
  • If your down payment is less than 20%, you’ll generally also need to get private mortgage insurance or PMI

Consider using a real estate agent (Me!)

While it’s easy to search for homes online today, you receive invaluable information and assistance by working with a licensed real estate agent.

A licensed real estate agent may help you navigate the home buying transaction more smoothly. Some of the benefits you’ll enjoy include:

  • Professional assistance and representation
  • Marketplace experience and access to up-to-date information
  • Services provided at no direct cost to you because the agent is compensated from the seller-paid commission when you buy a home

Get started finding a real estate agent by asking friends and family for referrals, ask your home mortgage consultant, or do your research online.

4.  How will the lender evaluate my home financing application?

When you apply for home financing, we generally use these four main criteria to assess your application.

Income

Do you have a reliable, continuing source of income to make monthly payments?

  • Income can come from primary, second, and part-time jobs, as well as overtime, bonuses, and commissions.
  • You may use other sources of income if you want them considered for payment, provided they can be verified as stable, reliable, and likely to continue for at least three years. Some examples include retirement or veteran’s benefits, disability payments, alimony, child support, and rental or investment income.

Current debts and credit history

Do you pay your bills, loans, credit cards and other debts on time?

  • We examine your payment habits before deciding to loan you money.
  • We also review your credit history and credit score.

Assets and available funds

Do you have enough funds for a down payment (if you’re buying a home) and closing costs?

  • You may use funds from various accounts including savings accounts, certificates of deposit (CDs), investments, and retirement funds.
  • If you’re buying a home, in some cases, you may be able to use gift funds toward closing costs and all or part of your down payment.
  • Generally, you’ll also need to show that you have additional funds in your accounts to cover several months of mortgage, tax, and insurance payments.

The property

What is the market value of the property you want to finance?

We will order a property appraisal to make sure the value of your property meets our underwriting requirements.

Responsible lending guidelines

The bank will approve applications if they believe the borrower has the ability to repay according to the terms of the financing. They use two ratio-based guidelines to evaluate your ability to repay.

Debt-to-income ratio

Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.

  • We compare your expected monthly mortgage payment (principal, interest, taxes, and insurance) plus other monthly debt obligations to your gross (pre-tax) monthly income.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your total debt level at or below 36% of your gross monthly income.

Housing-expense-to-income ratio

Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing payments.

  • We also compare just your expected monthly mortgage payment (including taxes and insurance) to your gross monthly income.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your housing expense level at or below 28%.

Even if you fall within the 28%/36% guidelines, make sure you’re comfortable making your monthly mortgage, insurance, and tax payments, in addition to all of your other monthly payments. Remember that homes have other costs — such as utilities, maintenance, and repairs — that may not exist if you rent.

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