* What to Look For in a Home -- also Traps to Avoid!
* Contract Contingencies: Mortgage, Home Sale (see p. 3 & 4)
Buying a home is the largest purchase most people will ever make. So this is not the time to "do it by yourself."
Benefits of Home Ownership
Tax Savings. You may earn significant tax savings because you can deduct mortgage interest and property taxes from your federal income tax and many states' income tax, if you itemize your deductions.
A more stable monthly housing expense. Your monthly housing loan or mortgage expense can remain the same for the life of your mortgage, depending on the type of loan you choose.
Equity. You may build equity in your home over the life of your loan, which allows you to plan for future goals like your child's education or your retirement.
Before you begin your home search, you'll need to secure a Mortgage Pre-Approval letter.Alice Campbell, our Gold Services Manager in my Westfield office, can help with this. Just send me an email, or give her a call on 908-654-7777 and schedule an appointment. The interview will take no more than an hour, and at the end of it, you'll know exactly what you can afford, and have the Pre-Approval letter you need.
Mortgage lenders typically use the housing expense and debt-to-income ratios to determine how much you can afford to spend on your mortgage.
Housing Expense Ratio Mortgage lenders recommend that your monthly mortgage payment should be less than or equal to a quarter of your monthly gross income. This percentage can change based on the type of mortgage you choose and sometimes the area in which you're looking to buy.
Debt-to-Income Ratio Mortgage lenders also factor in your other debts when determining an affordable monthly mortgage payment. They'll look at whether your total debt is larger than 30-40% of your monthly gross income.
Alice Campbell in my office will help you better understand these guidelines. Just give her a call, or send me an email.
Lenders evaluate mortgage applications a lot differently today than they did even 10 years ago. And even more has changed in the last 20 years. What used to close the door to homeownership may not be a factor today.
Here are some common homeownership myths:
Myth: You need great credit to become a homeowner. Fact: You may still be able to buy a home with less-than-perfect credit. And remember, there are strategies for improving your credit. In fact, Alice Campbell in my office will be happy to advise you on how to do this.
Myth: You need to put 20% down to buy a home. Fact: There are many types of mortgage programs that allow low and no down payments. Again, Alice Campbell in my office is a great source of information on the 360+ mortgage programs available.
Myth: You can't buy a home in the U.S. if you're not a citizen. Fact: If you're a legal resident, you can purchase a home in the U.S.
Myth: If you don't have a bank account or credit cards, you can't qualify for a mortgage. Fact: Having a bank account is always a good idea and helps you establish credit. However, lenders can approve you for a mortgage even if you don't have a bank account or credit cards. Talk to Alice Campbell in my office before you talk yourself out of your home-ownership dream.
Myth: Lenders share your personal financial information with other companies. Fact: By law, banks and other financial institutions are restricted in their uses and disclosures of information about you. In some situations, you may choose to restrict the disclosure of your information if you don't want it to be shared.
Myth: If you're late on your monthly mortgage payments, you'll lose your house. Fact: If you have a financial hardship, like the death of your spouse or a medical emergency and fall behind, it's possible to keep your home and get back on track if you contact your lender early.
Myth: You can't get a mortgage if you've changed jobs several times in the last few years. Fact: Not true. You can change jobs several times and still get a loan to buy a home. Lenders understand that people change jobs. The important thing is to show that you've had a stable income. Once again, Alice Campbell in my office is your very best source of information about mortgages.
GIVE ALICE CAMPBELL A CALL TODAY on 908-654-7777
or complete the form below if you'd like Alice or me to contact you.
