Get Ready Financially

In today’s real estate market your first stop as a buyer should be a meeting with a lender.

At this meeting the lender will evaluate your financial history:  income, debts, cash saved, investments, assets, liabilties and credit score to determine that you are credit-worthy.  Then the lender will determine what type of loan and loan amount you qualify for.  Based on this information your lender can issue you a Pre-Approval Letter.

5 Reasons Why PRE-APPROVAL Gives Peace of Mind

• You’ll know which loan type best fits your needs.
• You will look at homes that you can afford.
• You will be ready to make an offer when you find your dream home.
• The Pre-Approval letter strengthens your offer to purchase by showing that you are qualified to buy.
• There will be no surprises because you will know the amount needed for the down payment and closing costs.

When you meet with your lender you will need to provide the following information:

• Employment Information
• Social Security number
• Base Pay (pay stubs) – Overtime – Bonuses
• Real Estate income – Interest income – other regular income
• Value of real estate, life insurance, securities, bank accounts, automobiles and any other personal property
• Total due and monthly payments for current mortgage, loans, credit cards, alimony/child support
• Last 2 years’ W2s and federal tax returns
• Bank Statements

A good CREDIT SCORE helps you get approved for a mortgage and may even help you get a lower interest rate! 

You can get a copy of your credit report free at AnnualCreditReport.com.     You can also CLICK HERE to visit a website where you can get a copy of your free credit report and purchase a copy of your FICO credit score through Equifax which is one of the three companies that collect this kind of data.  The FICO credit score is the one that mortgage lenders look at.  The cost for this is about $15.00.

• 3 companies collect credit data:  Experian, Equifax, TransUnion.
• The higher your FICO score the better.  They range from 300-850.
• The average FICO score in the United States is 680.
• You can improve your FICO score by paying bills on time, reducing the amount you owe on credit cards and by correcting errors you find in your credit report.

Your lender will recommend the best LOAN TYPE for you.

Based on your financial information the lender will be able to identify the best loan type for you and advise you as to appropriate price range and what the monthly payment for the mortgage will be as well as what cash will be needed from you to cover the closing costs. 

 CLICK HERE to access an easy to use mortgage calculator.

Look at your monthly income and expenses and make sure you figure out how much YOU are comfortable spending on a mortgage payment each month and DO NOT exceed this amount even if your lender says you can spend more.

Remember…In addition to your downpayment you will also have to have cash to cover  the Closing Costs. 

The Buyer’s Closing Costs are computed on the following:

Closing Fees Payable in Connection with the Mortgage Amount: 

Additional Items Required by Lender to be Paid at Closing:

Title Charges:

Government Recording and Transfer Charges

Additional Charges:

Here are some things you should keep in mind:
■  Closing costs are not the same thing as the down payment. They are in addition to the down payment.
■  Not all of the above closing costs apply to every transaction.
■  There are some additional costs associated with some types of loans.
■  Sometimes a seller can be asked to contribute to the buyer’s closing costs.
■  Sometimes it is possible for the buyer to finance the closing costs.