When buying a house it is almost always best to do so with a good real estate agent. I am a real estate agent and have assisted many with buying a house or investment property. There are a series of steps involved and we shall cover them here one at a time.
First thing to do is check your credit report and see if there are any issues that you need to address. Many items can be challenged or corrected so don't despair if yours needs a little attention to get you above the minimum credit score. You can usually do this for free once a year from any major credit reporting agencies that is following your credit score. The better your score the better interest rate you will get.
Your monthly income, debt to income ratio and credit score will decide how much a mortgage lender will allow you to make in monthly mortgage payments. Various loan programs have different debt to income ratio limits. Lenders know that unexpected repairs happen and other costs and life expenses.
If you want more of a home loan it is not only not advisable but without a cosigner you probably will not find a reputable lender who will do it. There are nationally established guidelines for what is called qualifying loans.
You don't want the burden of monthly payments to suck the joy out of your life. It may be worth it to hold off while you secure funds to make more than a minimum down payment. Possibly even find a loan program that offers free, down payment assistance.
A larger down payment amount will increase the mortgage companies interest in your home loan and possibly help you avoid private mortgage insurance and other costs. Ultimately your next home's purchase price may be effected.
Your total monthly payment will include your homeowners insurance and property taxes. Homeowners insurance is paid in advance and property taxes are paid after they are due which is referred to as in arrears by real estate agents and mortgage loan officers. The total amount will be counted as the mortgage payment and the percentage allowed toward your total monthly income.
Conventional Loans- The most desirable type the seller wants to see is a Conventional loan. Conventional loans are harder to get and require higher down payments, usually but not always.
FHA Loans- FHA Loans are commonly used but come with strings attached.
VA Loans-Military Veterans & Spouses may use VA Loans.
Pay Stubs-Proof of employment for two years, pay stubs and bank statements monthly until closing. Check with your loan officer for details. The interest rate/mortgage rates you qualified for will not be the same if your situation changes.
Private mortgage insurance can be a real bummer. With some loans it never goes away. With others after you build equity you will need to have an appraisal to prove you have built equity and then approach the bank to have the mortgage company relieve you of it.
If they do then you will have a lower monthly mortgage payment. Placing a 20% down payment on a home loan will keep you from needing what we call PMI or mortgage's insurance.
You will need a preapproval letter when you start actively viewing homes. If you fall in love with a home you may loose the opportunity to buy it if you are not prepared with a preapproval letter.
A smart seller's agent will not only require one with any offer but often a seller's agent will want to view the proof of funds before allowing a tour in a hotter real estate market. They will prefer to see proof of funds as cash on hand or a conventional loans over a FHA loan.
Once you start the actual home buying process you will likely want to lock in the interest rate. Otherwise it may go up and effect the monthly mortgage payment and the purchase price you can be shopping for.
I hope to help you with that if you are purchasing in Windermere FL or even Winter Garden FL or a surrounding location. I know the housing market well and the area better than any real estate agent ever needs to. If you are actually buying a house here then I will assist you all of the way past the closing date.
Helps With The Home Search And Must Have Home Features
Local Market Expert
Is There On Closing Day
You will need to show proof of everything to the mortgage broker you are working with. Even proof you have funds on hand to cover the closing costs which will be 3-4% with a resale and slightly higher with a new home purchase. Your mortgage loan officer will want proof your financial condition and position has not changed throughout the home buying process and will check again right before you close the real estate transaction.
At some pointe you will find the right home and right purchase price fitting into your home buying budget. Then your real estate agent will get your offer approved. This is how you buy a house from that moment on. The home buying process has taken a turn for the better and the seller's agent will remove the home from the current housing market.
The earnest money deposit will need to be in the hands of the escrow officer within 3 days. This is best done with an electronic wire initiated by the home buyers. Make sure the directions for the wiring are in writing and actually from the escrow officers business email address. Normally the title company is the receiver of the earnest money deposit in Central Florida.
Within the first 5 days officially apply for the mortgage. Closing day will be here soon enough and I as the buyer's agent will be there to make sure we comply with the contract that leads to your dream home.
Home Inspection will take place within the first 5-15 days normally. As a buyer's agent I like 15 days but an experienced seller will want that number to be 5-7 days. During this time the home buyers usually pays a local professional home inspector to make a list of its defects. If needed the repairs are negotiated or the buyer backs out of the deal and mover toward buying a house from someone else.
After the home inspection and title insurance challenges its on the final approval of the loan details by underwriting. You should, receive final approval within 30 days after going under contract. If not there will be issues that need to be dealt with. As your buyer's agent I will keep you informed.
It is usually about this time that an appraised value addendum may be sorely missed if it was not used. If the home does not appraise for the right value that may cause many problems beyond the scope of this article.
Normally it is preferred to have the final walk through the day before closing. You as the buyer do not want to have to deal with any issues on the day of closing other than the closing costs and getting your keys.
It is not uncommon to have them and make sure everything that is supposed to be there is actually there. The home should also be free of the sellers property. Problems at this point are a real estate agents nightmare but they happen.
Finally we have made it to the closing. There are remaining down payments, closing costs, property taxes and other expenses which may cause you to bring funds in addition to the purchase price. You should have ben informed of these by the title company and lender a few days prior to close. Plan on closing to take around 1 hour and then you are complete and are ready to share with others how to buy a house when it is their turn.
407-575-5392
Mouse Asset Management LLC
DBA Morris & Co
Licensed in the State of Florida
BK 3146762
16797 Broadwater Avenue
Winter Garden, Florida 34787
