In any movie you watch, there will be a beginning, a middle, and an end. That is the course stories take and that is the course life takes. Applying for a mortgage is no different. Buying a home is a journey and within that journey the first step is to ask yourself, “How am I going to pay for it?” If you have cash on hand to pay for the whole transaction, then more power to you. But most people need a mortgage to help them get into the home of their dreams. In this post, I will guide you through the first stage of buying a home
Where to Start When Buying a Home in South Florida?
Financing Your South Florida Home
No reputable lender will give you 100% financing for your home– they want to see that you have some skin in the game as well. Home Financial Group has programs that can get you into your dream home for as little as 1%. Although this is an amazing program, you will still need to determine your available funds to cover the down payment.
When getting approved for a mortgage, there are specific ratios which limit the amount of income you can spend per month on your mortgage and other related housing expenses. Although these ratios are conservative in nature, some people do not feel comfortable paying 55% of their income on a mortgage or other related housing expenses. You need to figure out, based on your financial state, how much you feel comfortable paying per month.
Having all your ducks in a row is very important. Gathering important income and asset documents will help the mortgage professional be more efficient and grant you a pre-qualification or pre-approval letter as quickly as possible. Common income and asset documents include: tax returns for the last two years, one month of paystubs, your W2 or 1099 (depending on how you earn your wages).
Once you receive a pre-qualification letter, you know exactly how much house you can afford. This will help you obtain the best real estate agent possible to help you shop for your home. Obtaining a pre-qualification letter prior to shopping for a home is imperative– this will make things easier for you and your real estate agent.
Making an Offer on Your South Florida Home
Finally, you’ve found the perfect home. Now you need to make an offer. This is where the real estate agent’s expertise comes into play. You don’t want to low ball them because they can have better offers lined up. Also, you don’t want to offer them too much, because when the appraisal comes back below sales price; it’s tough to climb out of that hole. Your real estate agent can also help you negotiate for a seller’s contribution to assist in paying for your closing fees and any remaining taxes for the year.
We have outlined the steps to take during the first stage of buying a home. I know we are missing the middle and the end, and I am sure you’re anxious to find out more! Stay tuned for the next post on how to handle the next part of the home buying process. If you have any questions about the financing process leave a comment or give us a call! Our mortgage lenders will be happy to help!