Buyers
Home | Buyers
As a Beginner
Understanding the determined purchase price by your lender. A general rule of thumb is that you should spend about 30% of your gross monthly income on housing costs or PITI (principal, interest, taxes and insurance), and no more than 38% on combined total monthly house and other long-term debt payments. However, each person’s financial picture is unique and will be different based on their current financial situation.
Getting Your Mortgage Application Started
Being pre-approved by a lender shows the seller that you are a committed buyer, financially capable of buying the property, and more likely to close on the property. Keep in mind that pre-approval is different from pre-qualification. Pre-qualification is merely an estimate of what you may be able to afford. Pre-approval occurs when the lender has reviewed your credit and believes that you can finance a home up to a specific amount. However, neither pre-approval nor pre-qualification represents or implies a commitment on the part of a lender to actually fund a loan.
Here are some of the current documents you’ll need to get started:
Here are some of the current documents you’ll need to get started:
INCOME
⦁ Current pay stubs
⦁ W-2s or 1099s
⦁ Tax returns, usually for two years
⦁ W-2s or 1099s
⦁ Tax returns, usually for two years
ASSETS
⦁ Bank statements
⦁ Investments/brokerage firm statements
⦁ Net worth of businesses owned (if applicable)
⦁ Investments/brokerage firm statements
⦁ Net worth of businesses owned (if applicable)
DEBTS
⦁ Credit card statements
⦁ Loan statements
⦁ Alimony/child support payments (if applicable)
⦁ Loan statements
⦁ Alimony/child support payments (if applicable)
Factors influencing the Offer Price
Many factors influence the price that a buyer decides to offer to get their home. Sellers would like to have the best offer in purchase price and best terms. While only you can decide how much you feel comfortable offering for a property, we can gather critical information for you regarding the factors that impact how much you should consider paying for the home. These factors include:
⦁ The prices for other comparable homes in the area
⦁ If there are multiple offers
⦁ Schools ratings in that particular neighborhood
⦁ Walk Score
⦁ How long the home has been on the market
⦁ Upgrades done in the house
⦁ If the price has been reduced. Other items that might be included in the sale – furniture, hot tub, chandelier, etc.
⦁ Why the seller is selling
⦁ If there are multiple offers
⦁ Schools ratings in that particular neighborhood
⦁ Walk Score
⦁ How long the home has been on the market
⦁ Upgrades done in the house
⦁ If the price has been reduced. Other items that might be included in the sale – furniture, hot tub, chandelier, etc.
⦁ Why the seller is selling
Negotiating the Offer and the Contract
You may make your offer subject to certain terms or contingencies, including securing of financing or perhaps the sale of your current home. You may also make the contract subject to various inspections by both you and professional inspectors. We will review with you every aspect of your offer. Together, we will plan a strategy for getting the most advantageous terms for you – the buyer – at the price you are willing to pay for the property. Understanding the contingencies and Removing all Contingencies is very important in a real estate transaction. Please review my blog to read more.
Preparing For The Closing Costs
A home purchase is a complex transaction involving many parties and associated fees. In addition to your deposit and down payment, there are a variety of other costs involved in the close of escrow, including:
⦁ Loan origination fees, appraisals, and reports
⦁ Surveys and inspections
⦁ Mortgage insurance
⦁ Hazard insurance
⦁ Taxes
⦁ Assessments
⦁ Title Insurance, notary, and escrow fees
⦁ Recording fees and stamps
The lender will provide a good faith estimate of these costs prior to the close of escrow, so that you will know in advance what to expect. Some of these costs may be negotiable items with the seller. Naturally, we’ll walk you through each item in your good faith estimate to make sure you understand every detail.
⦁ Loan origination fees, appraisals, and reports
⦁ Surveys and inspections
⦁ Mortgage insurance
⦁ Hazard insurance
⦁ Taxes
⦁ Assessments
⦁ Title Insurance, notary, and escrow fees
⦁ Recording fees and stamps
The lender will provide a good faith estimate of these costs prior to the close of escrow, so that you will know in advance what to expect. Some of these costs may be negotiable items with the seller. Naturally, we’ll walk you through each item in your good faith estimate to make sure you understand every detail.