The Process

The Process

The Process

Below is an outline of the steps you’ll be taking as part of becoming a homeowner.

·         How much can you afford?

·         Getting pre-approved for a loan

·         Deciding on a mortgage

·         Fine tuning your budget

·         Begin searching for a home

·         Making an offer

·         Your offer is accepted

·         The closing

Getting Started

You’ve decided to purchase a home! Buying a home is an exciting and smart investment. Homeownership brings a sense of security and freedom of having your own space. Financially, it can provide an opportunity to build equity.

This guide is designed to walk you through the process of buying a home so you are prepared to act quickly when you find the perfect one. As you work through the home buying process, you’ll find that Brett knowles is a valuable resource, and you can feel confident your search for a new home will be successful.

Brett will help you find a home that fits your lifestyle and your budget.

How much Can You Afford?

Before you begin searching for a new home, you need to determine a realistic budget that takes into consideration your current debt (credit cards, loans, etc.) as well as homeowner expenses such as taxes, insurance, utilities and maintenance.

Getting Pre-approved

A lender will lend you money if they are sure your credit is strong and if they are confident you can pay them back.

To determine if you’re a good candidate for a loan, they will look at your credit score and study your financial history, income, federal tax returns and long term debt such as credit cards, auto loans, child support, etc. If your credit looks good, you have an excellent chance of obtaining a mortgage. Brett will provide you a list of the areas top leading professionals.

Establishing Good Credit

At one time or another, many people blemish their credit report. If your credit report is tarnished, these are steps you can take to repair the damage.

First, examine the credit report thoroughly and make sure it is accurate. If there are mistakes an the report, contact the credit reporting agency and ask them to remove the mistakes immediately.

Here are some helpful tips:

·         Pay your bills on time and in full

·         Limit how many credit cards you have

·         Keep separate checking and savings accounts

·         Stay at your current job for a few year- the longer the better

Decide on a Mortgage

After you are pre-approved for a mortgage, it’s time to decide on a mortgage type. There are many types of mortgages, and choosing the right one for you is an important decision. The two most common mortgages are Fixed Rate Mortgage and an Adjustable Rate Mortgage (ARM).

                Fixed Rate Mortgage- The interest rate remains the same for the entire term of the loan- usually 15 to 30 years- meaning the principal and interest portions of your loan will never change. With a Fixed Rate mortgage, your payments are stable and predictable; however, interest rates tend to be higher than an adjustable rate.

                Adjustable Rate Mortgage- The interest rate is linked to a financial index so the rate fluctuates with the changes in market conditions. With Adjustable Rate Mortgages, your payments will vary over the life of the loan, but is usually includes a lifetime cap on the interest rate increase in order to protect the borrower. The advantage of an Adjustable Rate mortgage is that it offers lower initial payments, making it easier for buyers to qualify.

When you apply for a mortgage, have the following items available for each borrower:

·         Two most recent pay stubs

·         Summary of current debt (credit cards, loans, child support, etc.)

·         W-2’s for the last two years

·         Federal tax returns for the last two years

·         Last month bank statements

Fine Tune Your Budget

Now it’s time to calculate your budget in more detail. To help you, here are three major costs associated with purchasing a property.

1.      DOWN PAYMENT: This is how much you pay upfront. The larger the down payment, the smaller the mortgage. The standard down payment is 20% of the cost of the home, but other programs are available, especially for first time buyers. Brett can help you determine which program is best for you.

2.      MONTHLY MORTGAGE COSTS: Include the mortgage, homeowner’s insurance, mortgage insurance (if applicable), property taxes and escrow deposits, which can be combined with the monthly mortgage payment.

3.      CLOSING COSTS: Include appraisals, title insurance, inspections, attorneys, title transfers and additional fees.