The first step in becoming a home owner is getting pre-approved for a home loan.
These days, a minimum of 3.5% is required for FHA loans up to $417,000.
Otherwise you’ll needed between 10% and 20% for a down payment for purchases above $417,000. Depending on your financial picture. Note you will also need about 3% of your purchase price for closing costs. We’ll review what closings costs are when we sit down together.
Before you contact a lender, gather the following items:
- 3 months worth of pay stubs per person or other proof of income
- 3 consecutive & most recent months of Bank Statements: Checking, Savings, IRA’s, 401k, Retirement & Investment Accounts
- Most recent Tax Return
- Social Security numbers
To prepare for your appointment, take time to calculate your monthly/yearly household budget and determine you comfort level. This will help you decide whether or not purchasing a home is right for you and your family. Prepare a:
- Household Budget
- Bills & Expenses Budget
- Future Budget factoring in your new home expenses.
We are here to help you each step of the way.
Got Questions – we’re here to help. Email us at Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/
Visit us on Facebook: http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834
To read my personal journey through homeownership – visit http://ajourneythroughhomeownership.wordpress.com/ Enjoy!
Establishing good credit is essential in today’s consumer environment. It is most critical when considering the purchase of a home and acquiring a mortgage.
5 Key Steps to Managing Your Credit
- Make your payments on time!
o A late payment affects your credit quickly!
- · Don’t max out your credit card – try to keep the balance at 50% or less.
o Its best to have a few cards at a half balance than 1 card maxed out
§ This rule is particularly true when you are shopping for a home loan
- · Don’t close ANY OLD credit cards!
o You will loose your “start” date and never get it back. The longer you have a card open the better it is for your credit score.
- · Do NOT open Store credit cards (i.e. A department store or music store)
o However, if you already have some open – DO NOT CLOSE THEM EITHER – just keep them active and paid on time!
- · Keep your credit open & active. For the cards you do have – use them every 3 months – allow them to send you a statement and then pay if off!
o It does you no good to use it and then pay it off online when you get home – you need the credit company to report the use to the bureaus and this happens every 30 days (when you get your statement).
- · Check your credit report every 3 to 6 months to prevent identity theft.
o Try http://www.annualcreditreport.com
- · Do not pay for your credit score – too many inquires done yourself will bring your score down!
Key Steps to Repairing Your Credit
Much like managing your credit well – repairing your credit requires the same rules. If you are shopping for a home loan and your score is too low here are some key steps to heal your credit.
- · Start making ALL your payments ON TIME no matter what!
o Your credit score can heal itself every 30 days
- · Start to consolidate your debt by paying off the high interest cards first while maintaining monthly payments on the other cards.
- · DO NOT OPEN any new lines of credit at all.
o When shopping for a home loan you could ruin your credit score and debt to income ratio with too many lines of credit.
- · DO NOT use a “credit repair” company
And SPEND WISELY – being a homeowner is like being a squirrel – sock away that money for a rainy day and create a budget you can live with and save with.
Got Questions – The Caton Team is here to help – email us at Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/