A mortgage broker and realtor share their tips for first-time house-hunters
Transitioning from a being renter to a homeowner is the true hallmark of adulthood for many. It can also be a time-consuming and somewhat intimidating process, especially if you aren’t sure what to expect. Kevin Cooke, a mortgage broker with Atlantic Bay Mortgage Group, and Sheryl Beauregard, a broker with Keller Williams, each offered five tips to get first-time buyers into their dream homes.
The process begins by determining what it will take to become mortgage ready. Kevin Cooke offered this advice:
Step 1. Know your credit score
Your credit report will have a significant impact on your mortgage; it affects interest rate, downpayment, program options and loan terms. The best steps to build and keep a strong credit report are: pay bills on time, keep credit card balances low and manage the total number of accounts in use. Actions that will hurt your credit profile are: making late payments, collections or judgments, maxing out credit cards and excessive credit inquires.
Step 2. Set a budget
Decide how much you want to spend each month on a mortgage payment and use that amount to help determine the price range of the homes you view. Potential buyers who begin shopping for homes without a budget in mind often find themselves in a home that isn’t realistic for their financial circumstances. Keeping your budget firmly in place will ensure the monthly mortgage payment fits within your overall financial plan.
Step 3. Document your income
A big part of qualifying for a mortgage is your income level. In most cases a two-year income history is required to qualify for a mortgage. Gather documents from the past two years including complete federal tax returns including all W2s and 1099s, and your most recent 30 days of paystubs. Those who are self-employed will need two years of your business tax returns.
Step 4. Save for a downpayment
In today’s mortgage environment, there are a wide range of loan products and program choices. Some mortgages require a significant downpayment while others require very little, but almost all require potential borrowers to have savings. The more assets you have available to you, the better loan terms you will be able to secure.
Step 5. Consult a professional
The mortgage industry has gone through significant changes over the past few years and the best way for you to fully understand what mortgage options are available to you and what best fits your needs is to meet with a mortgage professional. A loan officer can check your credit, determine affordability, review loan options and provide expert advice. Additionally there are incentives and special programs available to first time homebuyers that an expert can recommend. Meeting with a mortgage professional will help you understand exactly what it takes to qualify for a mortgage and determine what the next steps are to home ownership.
You’ve got your mortgage-readiness secured; now it’s time to shop! Sheryl Beauregard gives you her five house hunting tips to get the best house for your budget.
1. Determine your needs
Take time to sit down with your agent and talk about your lifestyle and wish list for your ideal home before you hit the house-hunting trail. Knowing what you want, and especially what you need, helps narrow down the search before you begin.
2. Be ready to accept “almost” perfect
Rarely do you find a home that is 100 percent of what you’re looking for. The 95 percent house is really the 100 percent house in the real world!
3. Act fast when the time comes
Move-in ready properties that are in good condition don’t stay on the market long. Be ready to act fast if you find a home you like that fits within your pre-determined parameters.
4. Focus on form and function
Be able to look past the sellers “stuff” and focus on the layout of the home and how it fits into your lifestyle. It’s easy to get turned off by a particular style of décor you don’t care for and pass up what might be a perfectly good property were it otherwise appointed.
5. Always have a home inspection!
No matter how nice and well maintained the property appears, always have the home professionally inspected. It protects your investment and can save you a major headache down the line.
Kevin Cooke, MBA
Branch Manager, NMLS #448201, Licensed in NC & VA
800 Green Valley Road, Suite 306, Greensboro, NC 27408
Direct: 336-501-7008 | Office: 336-656-8961 | Fax: 844-817-5519
Email: [email protected] | Web: www.atlanticbay.com/kevincooke
Keller Williams Greensboro North
Email: [email protected]