First-Time Homebuyer Mortgage Checklist

First-Time Homebuyer Mortgage checklist

The following first-time homebuyer mortgage checklist will help get you started on the road to your new home because the primary thing you need to focus on is qualifying for a mortgage, since you’ll need to know how much house you can afford. Being pre-qualified also shows sellers that you’re serious about finding your new home!

Income

  • Qualifying Income – Must have 2 years of income history to qualify
    • W2, self-employed or 1099 employee NOT bonus
    • Self-employed? Net income = Qualifying income
    • Not self-employed? Gross income = Qualifying income
  • Rental Income – Must have 2 years of rental income history to qualify
  • Other forms: Social security, commission, car allowances, child support, interest and dividend income. Be sure to see a mortgage professional for additional forms that may qualify.

Credit

  • Different loan programs have different requirements
    • FHA Loans: Can be approved with a credit score of 580
    • Conventional Loans: Requires a credit score of 620 – Most lenders require a 640 credit score
  • Good credit profile = Better rates – Anything over 740 is considered excellent
  • Factors that weigh on your credit score: Payment history, outstanding credit balances, credit history, debit/credit ratio, type of credit, and inquiries.

Assets

The following assets may be resources for your down payment and must be verified by your lender:

  • Savings/Checking account
  • IRAs, thrift saving plans, 401(k) and Keogh accounts
  • Stocks and bonds
  • Savings bonds
  • Gift funds
  • Sale of personal property
  • Downpayment assistance programs
  • Sale of real estate
  • Collateralized loans
  • Disaster relief grants and loans
  • Employer assistance programs

Approximately 5% of your down payment must come from the buyer on conventional loans.

Employment

  • Employment history of at least 2 years
  • Education counts as history
  • Self-employment must be greater than 2 years by the same business

VIDEO: See what else you need to know in buying a Boston area home

Joe Schutt

Committed to representing your interests with the highest level of integrity, I am dedicated to service excellence focused on personal attention and building a solid trust relationship. I listen carefully and make my clients feel comfortable in exploring their full range of real estate options and then encourage them to relax and rely on my expertise to insure that the details run smoothly and efficiently. Google+

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Finding Your Perfect Home

perfect home

As the old saying goes, real estate is all about location, location, location. But, there is a lot more to it than just plain geography when it comes to finding your perfect home. There are a lot of things to consider during the search because, for most, a home is the most significant purchase they will ever make.

Choose A Good Area

When searching for your perfect home, the obvious place to start is with the selection of a location. If you have children, you may want to choose a home that is close to good schools and is also located in a family-oriented neighborhood. Many people also look for a home that offers a short commute to and from work. If you are shopping within a specific price range, you can also narrow the choices by finding an area that offers the best value for your dollar.

Select A Style

The perfect home for you is one that has all of the elements that you want. Whether it’s a garage, basement, extra bedroom or bath, a large kitchen, fireplace or open floor plan, choosing the style of home that you want is an important first step in finding the perfect place to hang your hat. You may also want to consider whether you prefer a single-level or two-story home. Many home buyers also factor in floor plans when searching for a house, including those that offer an open and flowing design.

Get Pre-Qualified

Now that you know what you want and where you want it, it’s important to find out how much of a home you can afford. Pre-qualification is not the same as pre-approval. With pre-qualification, your lender will request specific information relating to your income and expenditures and will offer a possible price range for you to keep in mind while shopping. Pre-qualification does not guarantee that you will receive an approval, but it does give you a good indication of how much you can afford based on your current situation.

Talk To A REALTOR®

Nobody knows the real estate business like a REALTOR®, so let them help you in your search for the perfect home. They can answer questions relating to the neighborhood, recent inspections on a particular home and any needed repairs. Because a REALTOR® has access to a number of area homes, they have the ability to show you various choices within your preferred area and price range.

Ask About Amenities

One of the most significant concerns of any home buyer is what a home has to offer. Utilities, such as water, sewer, cable, phone and electricity are just a few of the things to consider. If the home is in a subdivision that requires the payment of association dues, how will these funds be used? What amenities does the home owner’s association offer? These are all questions to ask your REALTOR® when shopping for the perfect home.

In conclusion, you should know that the search for your perfect home is a journey. It may be either long or short and with or without some bumps along the way, but the greatest satisfaction will be at the journey’s end and your future’s beginning. 

Joe Schutt

Committed to representing your interests with the highest level of integrity, I am dedicated to service excellence focused on personal attention and building a solid trust relationship. I listen carefully and make my clients feel comfortable in exploring their full range of real estate options and then encourage them to relax and rely on my expertise to insure that the details run smoothly and efficiently. Google+

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Earnest Money Deposit

earnest money

An earnest money deposit, also known as a good faith deposit, is a specific dollar amount that a potential buyer pays to the seller in an effort to display their serious interest in a property. It’s important to note that an earnest money deposit is not the same as a down payment.

The Purpose Of An Earnest Money Deposit

An earnest money deposit is used to secure a purchase contract, which means the buyer doesn’t have to worry about the property being sold out from underneath them. Without an agreement, the seller would be free to sell the home at anytime. An earnest money deposit, however, secures the availability of the home as the potential buyer obtains an inspection, appraisal and financing for the purchase.

How Much Good Faith Is Enough

So, just how much of an earnest money deposit is required? Truthfully, it depends on a number of factors, including the home’s purchase price, your location and the standard as set by other sellers. In most cases, the earnest money deposit is negotiable and the seller will be happy in knowing that the potential buyer is serious enough to offer their money in good faith.

How An Earnest Money Deposit Is Used

If the transaction is successful and the buyer follows through with the purchase, an earnest money deposit is most commonly refunded to the buyer or applied to closing costs. If the buyer defaults or is unable to obtain financing, the seller often has the discretion to retain the earnest money deposit as damages or as otherwise described in the purchase agreement.

Using Your Dollars And Sense

When it comes to an earnest money deposit, it’s essential that buyers know who should receive the money and how to handle the payment. In most cases, the deposit should be made payable and presented to a licensed real estate broker, an attorney or escrow company. Your REALTOR® can assist in getting your earnest money deposit into the right hands. It’s important to obtain a receipt, which should clearly outline the purpose of the deposit. The funds will be handled in accordance with the purchase agreement and/or as agreed upon by both the buyer and seller.

Before handing over a good faith deposit, make sure that you have faith in the person accepting your money. Potential buyers should not give an earnest money deposit directly to the seller, nor should they give it to anyone who claims to be with a brokerage firm unless their credentials are verified.   

Joe Schutt

Committed to representing your interests with the highest level of integrity, I am dedicated to service excellence focused on personal attention and building a solid trust relationship. I listen carefully and make my clients feel comfortable in exploring their full range of real estate options and then encourage them to relax and rely on my expertise to insure that the details run smoothly and efficiently. Google+

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