HOME OWNERSHIP IS A PROCESS!
HERE ARE 5 TIPS TO PREPARE YOU TO BECOME A HOME OWNER!
- STEP 1. Start Saving for a Down Payment & Closing Cost Early - you may not qualify for down payment assistance due to credit score, income qualification etc. so the better idea is to start saving a couple years prior to your purchase unless you are expecting a gift or a large sum of money. For example, begin saving your income tax returns for several years before you are ready. You will need money for down payment assistance which can begin at 3.5% & up of the purchase price; you will also need money for closing costs which can be up to 6% of the purchase price. You will have upfront costs such as an escrow deposit, home inspection, termite inspection, wind mitigation, appraisal, etc. which are all calculated and included in your estimated closing costs.
- STEP 2. Check Your Credit Score & Report - To get down payment assistance most programs require you to have a min 640 score. If no DPA is needed then 620 & above will work. However keep in mind that the higher your score the better interest rate you will get and more loan programs will be available. Along with having a good credit score, you need to avoid collections, liens, judgements, late payments, high credit balances as all these factors will be reviewed by your lender and can prevent you from obtaining financing. Some items may be required to be paid off. If negative credit is a factor then you will need to take the time to repair and improve it.
- STEP 3. Get Prequalified for a Loan. Consult with a mortgage broker about financing options and get pre-qualified. The lender will review your credit score, debt to income ratio, recent tax returns, bank statements, paystubs etc and advise you if you are ready to enter into a contract or do you need to work more on becoming ready. If you are ready, they will let you know how much house you can buy, estimate of interest rate and if you qualify for down payment assistance if applicable. If you qualify for DPA your lender will discuss the various options with you. If you are not ready, the lender will discuss what your options are to get ready.
- STEP 4. Contract Ready. Once you have been PRE-APPROVED by your lender which means your documents, employment and income, etc have been VERIFED by your lender you are considered contract ready. You will be given a pre-qualification letter which will let you know that you are ready to obtain a home loan. It will indicate what your maximum purchase price is and what type of loan you qualify for - FHA or Conventional. YEAH! You are one step closer to achieving your dream!
- STEP
5. Hire an Experienced Realtor & Begin the Home Search Process. The
process of buying a home is an exciting but stressful event so it’s very
important for you to be represented by an experienced, patient and
knowledgeable REALTOR!
HAPPY HOUSE HUNTING!
*Read our next article - "The Home Buying Process" from Escrow to Closing!
If
you have questions about buying or selling a home, we have answers!
Donna Morton, REALTOR
Florida Summer Homes Realty, LLC
407-810-6520 - donnamorton22@gmail.com
www.FloridaSummerHomesRealty.com
www.Facebook.com/FloridaSummerHomes
