What If You’ve Had Bad Credit? Don’t despair if the credit report is not stellar.
Sure there are incidents that can’t be taken off the report but with knowing the background of your financial history, there are steps you can take to build your credit score.
Your first step will be to be sure all your bills are paid on time (late payments that are 30 days late or more have a negative effect on your credit rating).
It’s in your best interest to contact a mortgage professional. They will access and study your credit report and will help you develop a plan of action to improve your score.
They may, for example, advise you to reduce the number of credit cards you carry, pay any outstanding tax liens, and reduce your credit limits on your existing accounts.
The corrections you make on your credit will allow you to qualify for a better interest rate! Your mortgage professional will help you address problems showing up on the credit report.
How Much Money Do You Have To Come Up With To Buy A Home?
The amount of cash you will need is dependent on each situation, and is heavily influenced by the cost of the house and type of financing you will get.
There are three areas you must have enough money to cover – earnest money, down payment, and closings costs.
You make an earnest money deposit at the time you submit you offer to the seller, if is consider proof to the seller that you are seriously about wanting to house.
The earnest money deposit for a first time home buyer is general $500 to $1,000.
The down payment is the second deposit you make to the seller. This is the percentage of the cost of the home that you will pay out of pocket (not financed through your mortgage).
Your earnest money deposit is added to your second deposit which cumulatively becomes your down payment.
The more money you can put into your down payment, the lower your mortgage payments will be.
Some types of loans require 10-20% of the purchase, which is why many first-time home buyers turn to programs such as FHA loans which require only 3% down.
Again, your mortgage professional will be able to help you pick the program that is right for you!
The closing costs are the costs associate with processing the paperwork, title transfer, attorney’s fee, etc in order to buy a home. Closing costs are due at Settlement (time of closing) and generally range between 2 percent to 6 percent of the sale price.
As your lenders processes the terms of your mortgage, he or she must provide you with a “Good Faith Estimate” which will breakdown all costs so that you may know what to expect due at closing.
How Do You Know If You Can Get A Loan?
There are a variety of mortgage calculators you can access yourself on the internet to see how much mortgage you could pay.
For more accurate information, your best option again is to contact a mortgage professional. They can initially pre-qualify you for a loan amount. They will help you evaluate your loan potential.
This is a free service mortgage professionals provide before you start looking for a home.
You are under no obligation, this is simply for you benefit.
In addition to the Mortgage payment, what other costs will I incur? If you have always been a “renter” you may be used to your utilities being covered in your monthly rental payment, so paying your utilities may be new to you. Often the seller can give you estimates on how much the utilities normally cost. You’ll also have property taxes, normally these taxes are rolled into your mortgage payment, so check with your mortgage professional to confirm.
Now is the time to understand all your options when working with a Real Estate Investor (hint: we buy and sell houses with negotiable terms and price).
http://www.BuyHousesStPaul.com/
I’d be happy to set up a FREE consultation with you to help you achieve the dream of home ownership.
Robert Zuniga
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