Home purchase buying your new home begins with understanding the home buying process and the financial options available to you in today’s market will:
• Bring you some peace of mind that you done all your researches and can narrow down to what is specific to your unique situation.
• Help you make informed financial decisions to plan for that home purchase right now or in the coming months. Have a plan of savings and budget to meet your goals and not feel confuse, stress or daunting when it comes to buying a home.
• Home shopping confidently with your Real Estate Agent as you already been through the loan approval process and ready to put your best and highest offer on that dream home and know what is expected.
• Homeownership can bring you great advantage such as tax benefits like claiming your mortgage interest, property taxes and other expenses may be tax deductible. Growth in equity as you pay down your mortgage, you build equity in your home. Appreciation when the value of your home builds over time.
MORTGAGE LOAN APPLICATION:
This first step to mortgage application is to make sure your credit is in good standing and no surprise such as late payment, collection, judgement, foreclosure, bankruptcy or anything else that can delay the loan process for you to buy a home.
With this step we collect your person and financial information with your consent to begin the application process and then a credit pulled from all three credit bureaus Equifax, Experian and Transunion.
We will review your credit report with you based on what is reported for your credit score, accounts and payment history together and address any issue on the credit report and what you can do if anything now or needs more time.
WHAT DOES YOUR CREDIT SCORE MEAN?
Your credit score is a number that represents your ability to pay off your debts. Here are things about your credit score to keep in mind while you’re looking for a mortgage:
• Credit scores range from 300 to 850 points. The higher your credit score, the better.
• Average credit scores range between 660 and 720. A score above 680 will increase your chances of obtaining financing.
• Your credit score can also affect your interest rate. The higher your score, the more likely you are to get a lower interest rate.
• Avoid multiple credit pulls. Having your credit pulled multiple times may result in a decreased credit score.
• To help maintain an ideal credit score, use your credit cards, but try to keep the balances below 40% of the limit.
• It’s best to have at least 3 open and active accounts listed on your credit report
What is a Credit Report? It is an accounting of your credit history such as payments histories, length of time accounts is open, new account inquires, balances outstanding and other data reported to credit bureaus that can impact your score as you hold each account over time. The longer you hold the account the better as you have established a history of payment in good standing that can improve your score.
6 THINGS NOT DO WHEN APPLYING FOR A MORTGAGE HOME LOAN
• Do not make major purchases like furniture, appliances, jewelry, vehicles or vacations before or during the loan process.
• Don’t change or quit your job.
• Consult with your mortgage professional before withdrawing, depositing or moving large amounts of money in or out of your bank
• Do not pay off debts or collections (unless instructed to do so by a mortgage professional).
• Avoid using cash for a good-faith deposit – cash is difficult to verify and could result in a closing delay.
• Don’t have your credit report pulled too many times – this can hurt your credit score.
Collect Financial Documents:
• 30 days of current paystubs from all jobs
• 2 months of bank statements from all checking and savings accounts and retirement accounts if applicable
• 2 years of tax returns and W2s most current 2 years
• Driver license, social security card and other forms of identifications.
We evaluate these records to determine your financial stability, credit worthiness and ability to repay the loan to know how much you can borrow to purchase that dream home.
Working full-time for at least 2 years with no gaps is easiest to document your income and work history. If you change job as long as is same line of work or other beneficial reasons for job changes should be acceptable as long as we documented.
Lenders want to make sure you have a stable job to pay the mortgage if they give you a loan, since this is such big debt obligation. They like to see at least 2 years of work history at the same job and line of work for stable income.
We collect your 2 months of bank statements to verify if you have money right now to buy a house or not. If not, we look at the options of what you can do to save enough and how much time you will need before buying a home.
If you are unable to save where else you can get help to buy a home with down payment assistance if you have no funds or some funds but still need help.
Very important to keep all your checking and savings accounts in good standing and no overdraft fees or NSF fee as lender will look at that as being irresponsible and not managing your money too well. It puts a higher risk on you for making repayment on the mortgage loan if they approve you for a loan.
NO LARGE CASH DEPOSITS INTO YOUR CHECKING AND SAVINGS ACCOUNTS OR IT WILL NEED TO BE SEASONED AT LEAST 90 DAYS IN BANK ACCOUNT BEFORE YOU CAN USE THE FUNDS TO BUY A HOME, AS CASH IS VERY DIFFICULT TO DOCUMENT.
Generally, between 3-20% down payment depending on the loan program that you qualify for and funds you have available.
There is no such thing as FREE MONEY or zero down payment to buy a home. All loans have to meet a minimum down payment amount.
To start the mortgage loan process, you should have money available or save up anywhere between $2,000-$10,000 of your own funds if possible, in your account before you start the mortgage process and home buying process.
Different ways to get down payment:
Money you have save in checking/savings/retirement plans
You can get a gift from family member for most loan programs/gift means a family member is willing to gift to you for FREE with no repayment after.
If you qualify you can get a down payment assistance to help toward your down payment. There is no such thing as FREE MONEY or buying a home at zero down or zero closing costs. There’s always a catch to these programs so make sure understand the program requirements, terms and what to expect before proceeding with the available options to help you with down payment assistance.
Why do you need to have money?
Having money makes the process quicker and easier to get it approve so you can start looking at houses with your Realtor right away so no delay.
By having funds available you can take care of up-front costs such as earnest money, home inspection and appraisal fee to move your loan quickly and without delay of the loan processing as we don’t have to worry about fund shortage.
The risk the lenders evaluate on for you is less risker because they know you have a strong pattern of savings and managing your money so they know you can afford to pay the mortgage every month and chances of default meaning making late payment or going into foreclosure is less likely to happen and as promise to repay the loan back over times.
This Free Purchase Assistant has been designed to help narrow down options based on your individual needs. It’s quick, it’s easy, and the more questions you answer – the more accurate your results. You’ll receive the Purchase information you need instantly without all the calls and emails!