Finding and purchasing a home that will meet your needs, now and in the years to come, is a significant and often stressful time. My goal is to make this transition as smooth as possible. Here are some tips that you may follow to help make the search for finding your dream home real easy.
Before you start looking for a home, you should ask yourself a few questions:
- Where do you want to live? Do you want to be near schools, shopping or work? Greatschools.net is a great resource to research schools.
- What kind of house would you like (need)? Are you looking for a particular style? How many bedrooms and bathrooms do you want? Do you want a yard?
- How much house can you afford? Have you consulted a Realtor or mortgage lender to determine the size of the mortgage you would qualify for? Many mortgage companies found on the internet offer loans that sound too good to be true and they usually are so beware.
A few tips to help you get organized:
- Pull a credit report on yourself to make sure the information is accurate at Transunion.com, Experian.com, or Equifax.com. Everyone is entitled to receive one free credit report per year and can be obtained at AnnualCreditReport.com. It’s really quick and easy to do. If you find any errors, take steps to correct them immediately.
- Browse through real estate listings on the internet. Some of my favorite places to look are trulia.com, hotpads.com and realtor.com. This will give you a good overview of the types of homes that are on the market and what they cost.
- Visit open houses on the weekends. It doesn’t cost anything to look, and looking at a few different homes might give you ideas for features and amenities you’d like in a house but haven’t considered. The bottom line is you’ll be able to better understand your own wants and needs in a home. Finding open houses is easy at OpenHouse.com.
- Start saving money – you’ll need to have cash on hand for a down payment and closing costs. The down payment required will vary depending on your debt to income ratio, credit score, and the loan program. Closing costs typically run about 3% of the loan amount and the down payments typically start at 5% of the sales price. You will need a minimum of 20% down payment to avoid paying mortgage insurance.
- Don’t take on any additional debt. Pay down your credit cards and don’t apply for any new ones. Don’t make any major purchases on credit – buy the furniture or car later.
- Contact Hojin at Coldwell Banker. He can help you determine how much you can afford and provide you with information on homes that may interest you. Hojin can also be instrumental in assisting you complete all of the necessary forms when it’s time to make an offer.
How much house can you afford?
Simply put, you can afford a house that costs as much as the largest monthly mortgage payment you qualify for.
A quick way to estimate the size of mortgage you qualify for is to take your gross monthly income (that’s before taxes and other deductions) and multiply it by .28. This works out to just over 1/4 of your gross income.
Mortgage companies use something called qualifying ratios to determine how much they will lend you. Most mortgage companies use either a 28/36 ratio. The first number in each pair is the percentage of your gross income that the lender would consider acceptable as a monthly mortgage payment (i.e. if you make $3,000 per month, 28% of that is $840 per month).
The second number in each pair is used when all debt payments are considered, not just the mortgage. (i.e. if you make $3,000 per month, but also have a $250 a month car payment, 36% of $3,000 is $1,080, minus the $250 car payment equals $830). As you can see, in this example the numbers work out to be almost the same. Obviously if you have more debt, you would qualify for less.
Why you should work with a Realtor®
Working with Hojin Chang, Realtor at Keller Williams to buy your home is a good idea because he makes the home buying experience real easy:
* He will analyze your financial situation to help you determine how much you can afford.
* He is familiar with the process of buying a home and can explain things in plain language to you.
* He can easily access information on all properties listed for sale by Realtors in the areas you want.
* He can quickly set up appointments for you to see homes that interest you.
* He will skillfully complete all the necessary paperwork when it’s time to make an offer.
* He will help you arrange financing and advise you on the best strategies.
* He will be there at closing to answer your questions and make sure everything runs smooth.
Choosing a Realtor®
Searching for your dream home can be a time-consuming experience. Working with a professional like Hojin will make the process much easier.
Since most people spend a fair amount of time with their Realtor, it’s important to choose a Realtor you feel comfortable with, and one who is responsive to your needs like Hojin. The following questions will help you decide if a particular Realtor is right for you:
* Do they return your phone calls promptly?
* Do they ask you questions to determine what you want/need in a house?
* Do they listen to your answers?
* Do they perform a financial analysis to help you determine how much you can afford?
* Do they explain things clearly in plain language?
* Do they suggest various financing methods?
* Do they seem knowledgeable about SW Orlando?
* Do you feel comfortable spending time with them?
Hojin makes your home buying experience real easy.