Thinking Of Buying Your First Home
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Thinking Of Buying Your First Home

For the first-time home buyer, navigating the complex waters of securing a mortgage can be a daunting experience. I understand that buying a home can be a complicated, exciting and confusing process. While most prospective homeowners are anxious to tour homes and find their dream home, a few important tasks should be accomplished before walking through the threshold of a listed home.

After you were issue a pre-qualification (verbal, non-verify income, down payment, & credit score) and you have located the home of interest in purchasing, the lender will issue a pre-approval. A pre-approval is an application for credit and a lender’s written commitment (subject to verification). The pre-approval requires more information as to the property address, down payment, verification of assets (bank statements) & recent credit report, etc. Below is a brief explanation of what you need need to take before purchasing your home. Please visit my web site for complete detail.

Review Your Credit Report

Typically, the lender will consider a medium score (FICO) of 700 or better to obtain a conventional loan, non-government loan. Any collections, judgments and discrepancies on your report will need to be paid or satisfied before applying for a mortgage.

Debt To Ratio Income

Your debt to income ratio (DTI) is a factoring number the lender use to determine the risk level (level of debt) to figure out how much mortgage you can afford after all your other monthly DEBTS are paid. Keeping your credit DEBTS at 30% of your maximum credit limit will also help you keep your DTI low.

Employment

A W-2 employee, the lender will prefer to see that you have been employed for the least two years from the date of application. If you have been employed for less than two years, the lender would want see that you were employed in the same line of work for at least two years. You will need to provide the following documents: See my site for more information.

Down Payment

Lenders will typically prefer the borrower to put down 20% of the purchase price. Anything less than 20% down, the lender will add on a private mortgage insurance (PMI) onto your monthly mortgage payments. PMI protects the lender if you default on the loan.

Loan Review Process, Escrow and Title Preparation

After the title and appraisal have been submitted, the underwriter will review the loan for final stage of the closing process. The title company will hold the money and documents until all conditions on the commitment letter are satisfied. The title exam will ensure that the property is cleared of any judgments and discrepancy had been cleared before closing. The mortgage note and deed will also be prepared during this stage of the loan process.

Closing Cost

The lender should provide you a revised “Good Faith Estimate” with the cost associated with processing and closing fees, such as application fees, title, insurance, points, etc.

Signing, Closing & Title Transfer

Closing cost paid at closing would normally include such items as title exams, credit report fees, application fees, appraisal fee (if not paid outside closing, POC), settlement fees. Once both parties, seller & buyer, signed the title and all the contract has been verified, the title is transferred and the purchase price funds are disbursed to the seller. The key to your new home will be given to you at closing.

Having a team of professions who would assist & guide you through the home purchasing process will make a big difference in your home purchase experience.

Mortgage Loan Officer

Use a loan officer that’s local in your area. A good loan officer should interview you in order to know your needs and take your complete loan application with your complete documentation.

Real Estate Agent

Select an agent that’s local and that’s familiar with your area of interest. He/she should have a good understanding of the real estate market value in your area.

Attorney

You will need an attorney that specializes in residential real estate law.

Accountant

Your accountant should be able to determine if your proposed monthly payment should be considered in your budget. During tax session, your accountant should write off your closing fees and taxes paid during the year.

Home Inspector

Always have a license home inspector inspected the subject property after your offer have been accepted. The home inspection can save you from unexpected problems not visible to the naked eyes and save you money in the long run from unexpected repairs. Any damages found on the property can be address before the closing. You may also have legal rights to cancel the whole purchasing transaction.

Please feel free to visit my site for more information on home buying, life insurance and family topics that matters.

Ruben


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