How Much House can You afford ?
10 STEPS TO BECOMING A HOME OWNER
1. PULL YOUR CREDIT REPORT AND CORRECT ANY ERRORS.By law, under the Fair Credit Report Act, you have the right, free of charge, to dispute any entry on your credit report. Because your credit score and corresponding credit grade will play a significant role in your options when it comes to shopping for interest rates and mortgage programs, it is essential that you review your report ! You can request a copy of your credit report from the following bureaus online, mail or call via
TRANSUNION: 800-888-4213
EQUIFAX: 800-685-1111
EXPERIAN: 888-397-3742
or you may order a copy of your "merged" report , which lists data from all three credit bureaus, at
2. TAKE A FIRST-TIME HOME BUYERS CLASS. Accessing information on home ownership is easier than ever before. A good place to start is www.fanniemae.com , which offers useful tips on applying, qualifying, and purchasing for "first-time" home buyers and "re-financers".
3. GET PRE-QUALIFIED. The process of pre-qualification is an essential step. Most sellers and ALL real estate agents require a commitment letter that let's them know you have been contacted your lender and been
pre-approved" for a specific loan amount based on your current credit and income. If your credit is good, the prequalification letter may last for upt to 120 days, but if it is lower than average, or even "average", it may have to be renewed every 30 days.
4. DECIDE HOW MUCH YOU CAN AFFORD. When determining the big picture for your mortgage payments , calculate the monthly cost of your loan amount, along with the cost of home owners insurance and property tax. This total amount is called "PITI" (Principle, taxes, interest and insurance). This total amount amount added to other monthly debts such as car payments, student loans and or credit card debts should not exceed more than 28 percent of your gross monthly income. The less money you are committed to monthly, the more house you can afford.
5. DECIDE WHERE YOU'D LIKE TO LIVE. The location of your home, including school districts, business districts, economic growth areas and proximity to state and local highways will contribute to your home's property value. A good rule of thumb when evaluating the value of a prospective home is to consider what would make your future home attractive to purchasers when you are ready to sell.
When you are deciding on a new location or neighborhood to buy a home, ATL as your "Buyer's Agent" can help determine the pros and cons base on your family's needs and preferences. This is the biggest purchase of your lifetime, and you've got to make sure that you're working with someone you can trust.
7. INSPECT YOUR HOME AND NEIGHBORHOOD. During your first walk-through of a home, be sure to check out the condition of the roof, the plumbing, walls, floors, carpet, furnace and any interior or exterior damage. Drive through the area during different times of the day to observe traffic patterns and neighborhood routines. In addition to speaking with the sellers, talk to others who live in the neighborhood about their experiences in that location.
8. MAKE AN OFFER. When you have found the home of your dreams, you are ready to make an offer through a purchase and sales agreement that includes your offer price, your prospective closing date , your requested seller paid closing costs and the amount of earnest money as "good faith". NOTE: Don't forget to get a HOME INSPECTION.
9. APPLY FOR A MORTGAGE. Your mortgage broker can help select the mortgage that is right for you including interest rates, length of loan, size of loan, type of loan (Conventional, FHA, VA) and other fees. Once you have applied for your loan, it will be submitted for processing, underwriting, all inspections ordered and a closing date set.
10. CLOSING. At the end of the process, the buyer and seller meet at a real estate attorney's office to sign all legal documentation and effectively transfer ownership. The buyer pays remaining closing cost (that seller IS NOT paying) and down payment. Once all paperwork is completed, you will receive the keys ! Congratulations... you are now a home owner !!!