Buying

Financing and Mortgages


20 questions on saving money when buying a home

1. What financing is available? - Financing in our market varies almost as much as the homes do, there are assumables, adjustables fixed, balloon mortgages, etc. so before you buy make sure you are aware of the best for you. I can explain all these options to you.

2. Is loan pre-approval necessary? - This is very important and increases your bargaining power by knowing your financing is in place, subject to the home appraising for the sales price.. Many lenders offer free pre-approvals which are much stronger than pre-qualifications.

3. How do I get the best rate & terms for a mortgage? - A lender is just like any other commodity. The cheapest rate may not always be the best. Ask the lender to provide you with their costs, references and information about their company. You need the total cost to compare. Remember, if your agent has an ongoing professional relationship with a lender they can leverage better service for you.

4. What are the taxes on the property? - Is the property you choose a new home, taxed on land only, investment, no homestead, or owner occupied with a homestead exemption? I have access to the tax rolls for this information.

5. What utilities are available? - I'll find out if they are public or private utilities, and if there is a well, cable, gas, or electric for you.

6. Is there a seller's disclosure available? - Florida law requires all Home sellers to complete a seller’s disclosure, this reveals to the home buyer any and all repairs made to the property and anything that may currently be in need of repair.

7. How far are the schools? Shopping? - Are the children bussed, is the school within walking distance. How far is it to pick up milk? I know the answers.

8. What is the Home insurance & auto insurance requirements for the area? - The area you choose determines this. County and state requirement vary we have reports for each area.

9. Are there utility easements on the property? - Most properties are subject to easements, of some kind. Be prepared and find out what they are for the property you choose with an accurate survey.

10. Has the home ever been treated for termites? - This will be disclosed in the termite inspection. Again cost of the report is not the only factor.

11. What is the average monthly utility bill? - While all households are different, most sellers will be glad to share this information with a serious buyer, this can be a good indicator.

12. What is the traffic flow in the area? - We'll ride around the area you wish to purchase in and get a "feel" for the area, at peak and off peak times.

13. Do I need a Home Inspection? - This will discover potentially costly repairs and educate you about the property. You can expect to pay between $150&$250. It is money well spent. Make sure the inspector is licensed. Tell them exactly what you want to know and ask any unanswered questions.

14. Is there a Home Warranty? - They are normally available on a resale home and cover most of the major items. The seller if negotiated can pay them for. New homes must provide a one year warranty and some offer extended warranties.

15. What is Title Insurance? - Much like a life insurance policy, title insurance protects your equity in the property against future claims.

16. What is an appraisal? - This establishes the value of the property. I recommend that all contracts be contingent on a property appraising at or above the sales price of the home. This insures you will not over pay.

17. What is a market analysis? - This is a summary of homes, which have sold and are for sale, which closely resemble the property you wish to purchase. You should insist on a current analysis on the day you write your contract.

18. Do I need a Buyer Agent? - This is a form of agency in which the Realtor works in the Buyer's interest and not the Sellers. A good buyers agent should have formal training and be comfortable with this form of representation. I strongly recommend avoiding agents who don't offer an easy exit from your buyers contract. Getting locked into an agreement with an agent who is not performing can cost you thousands of dollars.

19. How long before I can close on my house? - With an informed agent and an informed buyer, the process, from beginning to end, can take less than thirty days.

20. What are the guarantees? - You have a right to expect that anyone who says they will do something does it. I guarantee my service, and I expect my vendors to do likewise. It is your money and you should do everything in your power to protect it. No one gets paid until the deal is closed.

top Δ



Obtaining Financing… Step By Step

1. Gather your documents.  Most lenders will need to see your most recent pay stubs, W-2’s, and bank statements.

2. Call a reputable lender.  Ask for a referral from your friend or your realtor.  Realtors generally will have a lender who has worked well for them in the past.

3. The lender you call will pull your credit report and match your documents with your credit score to give you an idea of the amount for which you will qualify.

4. Request a good faith estimate and a pre- approval letter.  This will let your realtor know what price range to look in and give you an idea of how much money you will need to close the deal.

5. Find a home.

6. Once you have a signed contract on your house forward that information to your lender.  Your lender will then take a full application by updating your information and good faith estimate.  He will also order an appraisal to insure you are not paying more for the house than it is worth.

7. Secure homeowners insurance and forward that information to your lender.

8. You should receive a Final HUD 24 hours before closing confirming the amount you will need to close.  You will need to get a cashiers check in the amount made out to the title company that is closing the deal.

(Compliments: David Holbrook - Mortgage Consultant for HomeBanc Mortgage Corporation
Phone: 407-248-4666 - email:DHolbrook@HomeBanc.com)

top Δ



Applying For A Home Loan

The following is a list of documents generally required when applying for a home loan. If you have these items available when you're ready to complete your application it will go much smoother for you.

1. W-2 (2 years) & last 30 days pay stubs.

2. Past 7 years landlord, mortgage company.

3. Name/Address Employer - 2-year history.

4. Contract of Sale.

5. Bank Name, account #, balances.

6. Latest 3 months bank statements, all accounts.

7. Open Loans - Name/Addresses, account #, monthly payments & balances.

8. Loan information on other real estate owned.

9. Certificate of Eligibility DD 214 (VA).

10. Check for credit report & appraisal.

11. Self-employment: Last 2 years tax returns with schedules, YTD.

12. Copy of Social Security Card (FHA).

13. Copy of Drivers License.

Once you've begun the loan process, your Mortgage Person will let you know any other documentation you'll need to get approved.

top Δ



How Lenders Decide On Loan Amounts

The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses.

Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, 4 should total no more than 41% of income. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

top Δ



Mortgage Qualification Check

This is a good checklist for your mortgage application. Right click and save the checklist image. You can then print for later use.


top Δ



Qualifying For A Loan

Can you qualify for your dream home? What can you qualify for? Here’s a popular real estate measure: you can afford a home that is two and a half times your annual gross income before taxes. Figure in your co-buyer=s Adjusted Gross Income, assets and liabilities too. The amount you have for a down payment and your approved loan amount will ultimately determine your buying power. Your monthly costs should total no more than 28% of your monthly gross. Your monthly housing costs plus other long-term debts should total no more than 36% of your monthly gross income.

If all of this seems too complicated, simply contact us to arrange an appointment with mortgage bankers we have established working relationships with. They will pre-qualify you so that you know how much money you can afford to spend, as well as the price range we should concentrate on, to find a home that fits you and your budget. Call 407-695-2066 or 407-222-6786 to set your appointment.

top Δ

Great Sites

Find Local Contractors

Shop Kids Desks - from toddler to teen!