Are You Ready? | Buying vs. Renting | Getting Started
Mortgage Basics | Credit Issues
Are You Ready?
Today, more than two-thirds of the country owns their own home. Before you become a proud homeowner yourself, your first step is to determine if you are really ready. Your decision to buy a home is a big one -- maybe one of the biggest financial decisions you'll ever make. That makes it especially important to arm yourself with the facts about home buying.
This page shows you some helpful tips to help you decide if you are ready. Once you know that buying a home is the right choice for you, read on. This section is loaded with lots of great guidance to make buying your home a fun and rewarding experience! Is Your Credit in Order?
It's critical that you get a copy of your credit report and credit score a few months before making such a major purchase. Check your report thoroughly to make sure there isn't any negative or incorrect information that could hurt your chances of getting a favorable mortgage. If there is incorrect or negative information on your credit report, get it fixed. Spend this time to get things in order -- for example, catch up on any overdue payments.
Can you afford it?
In today's market there are many options available to the buyer to aid with the "cost of buying". It all depends on the conditions of the market. Clients of The Fayetteville Home Team have paid very little out of pocket in the past, but because the market is always changing, this option may not be available to you. It would be best to contact The Fayetteville Home Team for their advise.
Do you have the down payment?
The down payment is often a percentage of the value of the property that you may be required to pay up front. Down payments can range from 3% - 20% of the property value, depending on the type of mortgage and the area where you are buying the house. If your down payment is less than 20%, you may be required to purchase property mortgage insurance. There are mortgages available that do not require a down payment at all!!
Do you have the closing costs?
Closing costs include points, taxes, title insurance, financing costs, and other settlement costs. These costs generally range between 2 - 7% of the property value. You will receive an estimate of these costs from your lender after you apply for a mortgage. When purchasing a home closing costs can be negotiated in the contract.
Can you prove you have the money?
If your money is in a savings account, the lender will need proof that the money's there, for how long, and that it wasn't borrowed. Some communities have special programs that allow first-time buyers to accept gifts towards the down payment. But some lenders require a certain amount of the down payment come from savings you have accumulated personally. In almost all cases, the lender requires a gift letter verifying that the gift does not have to be repaid. Other Questions to Answer
- Have you been employed regularly for the past two years, receiving dependable and adequate income?
- Do you always pay your bills on time?
- Is your total debt, including credit cards and car loans, manageable?
- After you pay the down payment and closing costs, can you afford the mortgage and other expenses, such as electric, water, and repair costs?
- Do you plan to live in the house for at least two years so that it builds some equity?
If you can answer yes to at least most of these questions, now is probably a great time to consider buying!
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