Before Buying A Home In Orlando

Things To Do Before You Buy A Home In Orlando

Do your homework before you buy a home. Buying a home will be one of the most important decisions that you will make in your lifetime. Most home buyers get a bit overwhelmed when they realize that they are about to be on the hook for an enormous debt for the next several decades.

In order to avoid these feelings of doubt and anxiety is to make sure that you’re buying a home that you can really afford. Here are some tips you can use that will help you to make good choices when it comes to buying a home.

 Figure out how much you can afford.

As a rule of thumb, you can generally afford a home between 2 to 3 times your annual gross income. It’s important to consider all costs involved with owning a home like property taxes, homeowners insurance, HOA fees if applicable, maintenance, utilities, etc.

In addition to costs associated with the home, you must also include your own personal expenses like food, health insurance, daycare, car insurance, etc. Make sure to include everything no matter how small the expense.

 What type of home suits your needs?

Wanting something and needing something are two very different things so be realistic when you’re making your home wish list.  Make a list of certain things that the home must have in order to meet your family’s needs then make another list of things would like but don’t really need. This will help you to focus on the things that are truly important when shopping for a home.

If you really want granite countertops and high-end appliances and it fits your budget, then go for it. Just make sure that you’re being realistic with yourself.

 Figure out where you want to live

 Then decide what your second and third choice would be for the neighborhood you choose to live in. Ask your Realtor for recommendations about neighborhoods based on your priorities. Don’t settle for a neighborhood that you really don’t want to live in. You will surely regret it.

 Save for the down payment 

Remember when your mom and dad told you to save for a rainy day? Well look up and you’ll see the clouds starting to form. Generally, to get the best terms on a loan, you should plan on coming to the table with at least 20% of the purchase price. If you go lower than 20% then your lender will require you to get PMI [private mortgage insurance] which will add between $200 to $300 to your monthly mortgage payment.

Also, keep in mind that the less you put down, the higher your loan amount will be and the higher your payment will be. If you’re a first-time homebuyer, It’s also a good idea to see if you qualify for any state or federal programs that help with down payment assistance.

 Be clear on the closing costs

Consult with your real estate agent about all the additional costs involved with a real estate transaction, especially the ones that you’ll be responsible for. Items like transfer fees, home inspections, attorney fees, etc. can add up to a substantial amount.

Consult with your realtor about negotiating the closing costs with the seller before committing to anything. Like my teacher said on the first day of real estate school…Everything in real estate is negotiable. Sometimes it comes down to the realtors involved in the transaction. If the listing agent is more experienced and a better negotiator, then chances are the buyer will get the short end of the stick.

Get pre-qualified for a loan

There’s a ton of paperwork involved with getting a loan, so be prepared. Lenders require proof of income, bank statements, w-2’s, etc. The smart move is to get pre-approved before you even start looking at homes. That way you know exactly how much you can afford to pay for a house and you’ll be ready to submit an offer right away. There’s nothing worse than finding your dream home only to find out that it’s out of your budget.

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Mortgage Regulations Change In 2014

With 2014 came a whole new list of regulatory and legal changes for mortgage companies.  These rules and regulations were established with the intention to help both lenders and borrowers from making bad decisions when it comes to home mortgages. Here is a list of regulations that began in January that will affect the mortgage process for potential home buyers according to the Assoc of Mortgage professionals.

New Mortgage Regulations

* Stricter Regulations for the Self-Employed. People that don’t have an IRS form w-2 will be finding it more difficult when you apply for a loan. It’s a much greater task for individuals to prove their debt to income ratio without documentation even if their net worth is high with perfect credit to go along with it.

* A Decreased FHA Loan Limit. The Federal Housing Authority has announced that as of the beginning of 2014 that mortgages shall not exceed the amount of $625,000.00 which is down from the previous amount of $729,750.00. People wanting to apply for a larger loan would have to apply for a “Jumbo Loan”, which will probably involve a much higher down payment.

* A Cap on Loan origination Fees. As of January 2014 points and fees for a new mortgage cannot exceed 3%of the total loan.

* The Ability to Repay Mandate. This regulation was set in place by the (CFPB) Consumer Financial Protection Bureau. Its purpose is to set a standard for lending to make sure that each borrower is a truly qualified borrower. Lenders will now have to follow a set of rules in order to establish a consumer’s income, assets, and current obligations before approving them. This is what the government considers a “Qualified Mortgage”.

As a Realtor in Orlando, I think it’s a great idea that these new rules are now in place. It helps to protect potential homebuyers from getting in over their heads and in the long run, it should decrease the number of future homeowners from falling into default with their lenders. These are signs that the mortgage industry has learned a lesson from the real estate crash of 2007.

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Five Great Tips For Reducing The Burden Of Buying a Home

Purchasing a home is a goal that many people have, and to do so is quite an accomplishment, especially in very expensive areas of the country. However, no matter how much money you have, buying a home tends to be at least a little bit of a burden. How can you reduce that stress?

Give Yourself Time

Some people start looking for houses right as their apartment lease is about to be up or as soon as they are going to start a new job. Purchasing a home is a process that takes time. The actual process of getting the house will eat up a lot of time, and so will going around to look at potential homes. Trying to squeeze all of this into a short time frame is only going to stress you out.

Choose Affordable Areas

You also do not want to get yourself in too deep with the mortgage. Do not feel as though you need to purchase the biggest home in the most regal area right away. Plenty of real estate in upstate New York is affordable and in nice areas. Remember, you need to feel comfortable in the town and house; other peoples’ opinions of them do not matter. Many live in a starter house and then upgrade later.

Don’t Max Out On The Mortgage

Before you are actually able to buy a house, you are going to get approved for a mortgage. No magic number exists for determining how much you’ll be approved for; however, many estimates do put the figure at about 3.5 times your total salary or salaries. Still, though, this doesn’t mean that you should spend that much on a home. Factor in utilities, groceries, car payments, etc., and you’ll quickly see why.

Don’t Do It Alone

Trying to find a house without a real estate agent can be a little bit overwhelming. Some do feel that they are able to procure a home without assistance, but others make the decision to select another company. These agents can help you to find the perfect home and ensure a cohesive process.

Remember Closing Costs

When you are closing on the house, you are going to have to pay money out of pocket. Some people forget this, and then they find themselves in an unpleasant situation. Find out how much closing costs are going to be right away so you can plan accordingly.

When you enter your home, you’ll be thrilled to have a place to call your own. These five steps will help the process to run more smoothly.

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