Important Questions and answers when buying a home.
The Buying Process:
How to Enter the real estate market
Understanding the local real estate market
Determining your budget and getting pre-approved .
It’s important to know how much you can afford before you begin actively looking for a house. It’s very tough looking at homes you cannot afford. If you end up liking one and cannot get buy the home it can be heartbreaking.
How do you get pre approved?
We have a few experienced mortgage lenders who can answer your questions and guide you thru the loan process and get you pre approved so we can help you find act on a home once you find your dream hou..
What will the lenders want from me? Employment history
- Credit reports
- Financial documents
- Annual income
- 1099 income, self employed Ect
This will determine the interest rate the lender will charge the buyer and offer the borrowing loan options such as FHA-VA-Conventional, Will the seller offer contract for deed financing if I cannot get approved? Some sellers will offer owner financing but most want to cash out. Contact us we can help guide you thru this process if you cannot get a mortgage the traditional.
Types of loans
VA loans are backed by the Department of Veteran, Affairs, and they are guaranteed to qualified veterans and active-duty personnel and their spouses. VA loans can be approved with 100 percent financing, meaning VA borrowers are not required to have a down payment. Unlike FHA loans, borrowers do not have to pay mortgage insurance on VA loans, but may be subject to a funding fee (paid by the seller or rolled in to the loan).
FHA loans are insured by the Federal Housing Administration and are typically design. to meet the needs of first-time homebuyers. FHA loans require a down payment of as little as 3.0 to 3.5 percent of the sale price of the home. Because the agency is taking on more risk by insuring these loans, the borrower, are expected to pay mortgage insurance and the property must be owner-occupied. An FHA mortgage insurance premium (MIP) is calculated annually.
Not researching down payment assistance programs
Saving for a down payment is often cited as the biggest hurdle to homeownership for first-time buyers. There are thousands of down payment assistance programs in the U.S.
These programs typically offer “soft” second or third mortgages or grants which allow for zero percent interest rates and deferred payments.
Spending your entire budget
When a lender provides a pre-approval letter, they’ll typically include the maximum amount they will lend you. But just because a lender will let you borrow a certain amount doesn’t mean you should spend it.
There are rules lenders follow to determine what you can borrow, such as the 28/36 rule, which says that a homeowner should spend no more than 28 percent of their gross monthly income on housing expenses, and no more than 36 percent on overall debt. But buying a home also comes with significant upfront costs, such as the down payment and closing costs, so you’ll want to make sure you have savings left for emergencies and other unexpected expenses after you close on your new home. Most of the time we can get the seller pay the buyers closing costs by either putting it in the offer to be paid or we may have to raise the price to cover the fees.
Don’t pre-qualified at the last minute
Many first-time buyers wait until they’ve found a home they want to buy before taking to a lender Big Mistake”. Pre-qualification can help you shop in your price range, act fast when you find a house you want to make an offer on, and catch — and correct — any errors on your credit report before they cause a problem with your loan. This could help save you thousands in the long run because an error on your credit report could result in a lower credit score, leading to a higher interest rate. Over 30 years at a $100 more month is a lot of money to give up.
Don’t Assume you won’t qualify
Many renters think they can’t afford to buy a house because they haven’t saved enough to pay a 20 percent down payment. But you might be surprised to see what kind of house you could potentially buy based on the amount you spend every month on rent.
While 20 percent is ideal, you don’t necessarily need that large of a down payment to buy a home. There are loan programs that cater to first-time home buyers, such as the FHA loan, which allow for down payments as little as 3.5%. Even some conventional loans allow for down payments as low as 3 percent. And certain loans, such as VA loans for veterans and military or USDA loans for buyers in rural areas, don’t require a down payment at all. Contract for deed you will need 10% down but credit usually isn’t an issue.
View our contract for deed programs.
We have more homes for sale than what you see on our site. Our site is updated every 15 minutes by North Star Mls.
If you don’t see what you are seeking let us know. We have investors who will purchase homes for you and sell them back with 15% to 20% down their contract for deed programs are their own programs.