The Presidential Inauguration is a good time to not only asses our nations plans, but to look at your own future. Where do you plan on being in the next 4 years? Some may think that having a 4 year plan is looking out too far, but just think about how recent it seems to be concluding another Election. It's good to have goals even if we don't quite meet them because you know that you were working toward something.
Most people want the satisfaction of owning a home but don't know how to escape the renting cycle. With an FHA Home loan all you need is 3.5% down, sometimes less. Most of you can handle that with your Tax Returns.You also need to have a Credit worthy FICO score. Some banks like American Home free mortgage ( http://www.americanhfm.com/brie-henley/ ) and RH Lending ( http://rhateam.com/ ) only require a score of 580! Of course having a better score will help with your interest rate, so you may want to get your score as high as you can get it.
FIRST: Determine how much house you can
afford. Before buying a new house, there are
different measurements that would help you in choosing an affordable one. Make
sure that the monthly payment would not exceed your gross monthly income with a
big percentage. For instance, almost one-fifth of buyers get Federal
Housing Administration (FHA)-insured loans. With FHA financing, your home
payment should not exceed 31 percent of your monthly income. By knowing how
much house you can afford, you will save yourself a lot of time and
money. There are several factors that determine the amount of house you
can afford.
a) Your
annual income
b) The
amount of cash you have for a down payment
c) Other
mortgage related costs
d) Mortgage
interest rate and terms available at the time you make the purchase
Naturally, you can borrow more money for the same monthly payment while the
interest rates are lower. Indeed, it is important to know the interest rate,
points, term of loan and down payment in advance. For example, a family
in Texas that brings $3,215 a month purchased a median home that has a price of
around $200,000. Here, the family will pay 5% down payment of $10,000; a
30-year fixed (6.5%) mortgage of $1,200; and the taxes and insurance amounting
to $333. Notice that the Principal, Interest, Taxes and Insurance (PITI) is
$1,533; this family is spending 47% of their net pay on a median priced
home.
It is really important to know how much house you can afford so that you can
plan your budget. Buying a house that exceeds your budget can be
disastrous.
3. Get
pre-approved for the mortgage. Before shopping for a home, you can ask for
mortgage pre-approval. When you get pre-approval, the mortgage lender reviews
your current financial situation and credit to gauge how much they are willing
to lend you. Getting pre-approved for a mortgage is highly important for two
reasons: you know what you can afford and the possibility that the seller
accept your offer over another that is not pre-approved. There are
several steps for getting pre-approved for a mortgage.
a) Talk
to different mortgage lenders and find the best mortgage package that fits your
needs.
b) Prepare
completely your financial biography by securing your Federal tax returns for
the last two years, proof of investment income, bank statements, etc.
c) Watch
your credit score.
d) Find
a reputable and legitimate lender to deal with.
e) “Watch
the clock” meaning keep an eye on the documents like pre-approval letters and
verify their expiration dates.
Indeed, if you don’t apply for a
mortgage pre-approval, you’ll not be able to figure out what you can afford or
worse, there will have little or no possibility that the seller accept your
offer.
We now understand that planning and preparing steps
are not as difficult as we think but it’s just a piece of work that we have to
accomplish as an essential component of a whole task (buying a house).
Check out our Facebook!
^ ^ ^ ^ ^ ^ ^ Check out our Facebook ^ ^ ^ ^ ^ ^ ^ ^
.
No comments:
Post a Comment