Monday, August 19, 2013

Preparing for your purchase

Buying a home could be one of the most complicated financial transactions of your life. If a home purchase is anywhere in your future, it's never too early to check your credit and do what you can to strengthen it. Experts say that credit scores above 750 get the best rates and anything below 640 to 660 may not even qualify for a loan.
Before falling in love with a house, determine your budget. FHA loans dictate that home payments can't exceed 31 percent of your income. Don't forget taxes and insurance as well.

Take the time to get pre-approved before you begin looking at homes. In fact, many real estate agents won't work with you until you have received pre-approval for a mortgage. You might find the perfect home, and then find out the bank denied your loan application. This heartbreaking scenario wastes your time and your agent's time, too.
Going through the mortgage-approval process can be a frustrating experience, so be prepared. In addition to all of the paperwork, you have to answer a lot of very pointed questions about your income, net worth, and credit worthiness. If you have a 20 percent down payment, a high credit score, and a steady job, then you have a better chance of being pre-approved for a loan.
Having the largest down payment possible will work in your favor. You may need to start saving months, or even years, in advance to get a significant chunk of money saved. Create a budget that will keep you on track to pay down debt and save for a down payment.
It’s an obvious no-no, even if you aren’t applying for a loan. But overdraft charges are red flags to underwriters, so make sure you walk the line from here on out.
If you're not planning on staying in your home more than seven to ten years, think about renting. You may still decide to buy, but you need to understand the cost of purchasing and maintaining a home. Investigate the economic difference between buying and renting.

Don't wait until after you have found an acceptable property to begin determining what your choices and options are. Having your mortgage picture clear prior to looking for houses can only strengthen your bargaining position when it comes time to negotiate for the home you want. If two different buyers are interested in the same house, one who has been pre-qualified for a mortgage and the other who plans to do it in the future, you can guess which buyer will have the stronger bargaining power.

To receive personalized rates please email me at with your available times to discuss your options.