With today’s credit crisis and financial woes, getting a mortgage for your home, condo, or oceanfront property in Virginia Beach, Norfolk, Suffolk, Chesapeake, or Hampton Roads can be a complicated real estate process.
Below we continue our previous discussion on financing and continue with the mortgage aspect of “Real Estate by the Numbers”.
What is your home lender trying to find out from you? Do you have numerous questions for your mortgage professional?
Our last article discussed financing (Part 1) and the previous article talked about “why do you want to buy a home”
1. You Lender will look at:
a. Debt to Income Ratio - Which means what is your debt as a percentage of your gross income.
b. What is best home mortgage product that meets your need such as 30 year fixed or 5-10 year ARM.
c. What the lender’s fees are.
d. When is best time to “lock” your interest rate.
e. Options regarding Private Mortgage Insurance (PMI) in Virginia Beach or Hampton Roads
f. Whether any points are to be paid on your home purchase
g. Lender’s and Home Owner’s Title Insurance
h. Verify you have funds for down payment
i. Verify your income for the real estate purchase
2. Have you been saving? There are really three items below that require you
to save now.
a. Real estate down payment. Your home purchase in Virginia Beach,
Chesapeake, Norfolk, Suffolk, or Hampton roads in all likelihood will require
some sort of down payment. With the subprime fallout, there is not much 100% financing available to everyone.
Check with your lender as some programs do exist, but in general the lender
would like to see some “sweat equity” in your home loan.
If you are receiving a gift from family or other persons to use for your down payment, consult your mortgage lender about limits and requirements to be met.
b. Prepaids: These are the items at closing that require upfront money. They include taxes, one
year’s hazard insurance, and other items.
c. Contingency Fund: Think it over, play out scenarios, have a 6-12 month rainy day fund, and be comfortable in your new home.
Ask your home mortgage lender to “ball park” a. b.and c., above so you have a general
idea of worst case scenario. Also make sure you get a “truth in lending statement” from your real estate lender.
3. After your visit to your home mortgage lender you will know how much real estate you
qualify to purchase. Make sure you do a sample budget to figure out if you have enough money to live on. Just because you can qualify for $300,000 does not necessarily mean you can live comfortably with that payment.
4.
Your home mortgage lender will give you a pre-approval letter once everything is in motion. This
is a must-have prior to starting the home search portion of your real estate
purchase. The pre-approval letter properly crafted puts you in a powerful position when getting ready to
write a purchase offer.
5. Lastly, no new purchases on credit while you are in the “home buying mentality”. Nothing can reduce your buying power like new credit. It will be checked again before closing, so do not screw up your dream of home ownership in Virginia Beach, Chesapeake, Norfolk, Suffolk, or Hampton Roads.
Stay tuned for the next installment - Buying vs. Renting and Buyer Mistakes.
See how your REALTOR® provides value and represents your interests only whether new construction or resale.
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Previously scheduled for the Virginia Beach real estate development of North Shore at Ridgely Manor it was then moved to Suffolk.
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