So you made an offer, it was accepted, and now your next task is to have the home inspected prior to closing. Oftentimes, agents make your offer contingent on a clean home inspection. This contingency allows you to renegotiate the price you paid for the home, ask the sellers to cover repairs, or even, in some cases, walk away. Your agent can advise you on the best course of action once the report is filed. How to Choose an Inspector Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. HGTV recommends that you consider the following 5 areas when choosing the right home inspector for you: Ask your inspector if it’s okay for you to tag along during the inspection, that way they can point out anything that should be addressed or fixed. Don’t be surprised to see your inspector climbing on the roof or crawling around in the attic and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace and chimney, the foundation, and so much more! Bottom Line They say ‘ignorance is bliss,’ but not when investing your hard-earned money into a home of your own. Work with a professional who you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase. Source: https://www.keepingcurrentmatters.com/2018/05/08/home-inspections-what-to-expect/
Some homeowners have recently done a “cash out” refinance and have taken a portion of their increased equity from their houses. Others have sold their homes and purchased more expensive homes with larger mortgages. At the same time, first-time buyers have become homeowners and now have mortgage payments for the first time. These developments have caused concern that families might be reaching unsustainable levels of mortgage debt. Some are worried that we may be repeating a behavior that helped precipitate the housing crash ten years ago. Today, we want to assure everyone that this is not the case. Here is a graph created from data released by the Federal Reserve Board which shows the Household Debt Service Ratio for mortgages as a percentage of disposable personal income. The ratio is the total quarterly required mortgage payments divided by the total quarterly disposable personal income. In other words, the percentage of spendable income people are using to pay their mortgage. Today’s ratio of 4.44% is nowhere near the ratio of 7.21% during the peak of the housing bubble and is instead at the lowest rate since 1980 (4.38%). Bill McBride of Calculated Risk recently commented on the ratio: “The Debt Service Ratio for mortgages is near the low for the last 38 years. This ratio increased rapidly during the housing bubble and continued to increase until 2007. With falling interest rates, and less mortgage debt, the mortgage ratio has declined significantly.” Bottom Line Many families paid a heavy price because of questionable practices that led to last decade’s housing crash. It seems the American people have learned a lesson and are not repeating that same behavior regarding their mortgage debt. Source: https://www.keepingcurrentmatters.com/2018/04/19/is-family-mortgage-debt-out-of-control/
How do you select the members of your team who are going to help make your dream of owning a home a reality? What should you be looking for? How do you know if you’ve found the right agent or lender? The most important characteristic that you should be looking for in your agent is someone who is going to take the time to really educate you on the choices available to you and your ability to buy in today’s market. As the financial guru Dave Ramsey advises: “When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.” Do your research. Ask your friends and family for recommendations of professionals they’ve worked with in the past and have had good experiences with. Look for members of your team who will be honest and trustworthy; after all, you will be trusting them to help you make one of the biggest financial decisions of your life. Whether this is your first or fifth time buying a home, you want to make sure that you have an agent who is going to have tough conversations with you, not just the easy ones. If your offer isn’t accepted by the seller, or they think that there may be something wrong with the home that you’ve fallen in love with, you would rather know what they think than make a costly mistake. According to the Home Buyer and Seller Generational Trends Report: “Buyers from all generations primarily wanted their agent’s help to find the right home to purchase. Buyers were also looking for help to negotiate the terms of sale and to help with price negotiations.” Additionally, “Help to understand the purchase process was most beneficial to buyers 37 years and younger at 75 percent.” Look for someone to invest in your family’s future with you. You want an agent who isn’t focused on the transaction but is instead focused on helping you understand the process while helping you find your dream home. Bottom Line In this world of Google searches, where it seems like all the answers are just a mouse click away, you need an agent who is going to educate you and share the information that you need to know before you even know you need it. Source: https://www.keepingcurrentmatters.com/2018/04/03/what-should-you-look-for-in-your-real-estate-team/
Some Highlights: Source: https://www.keepingcurrentmatters.com/2018/05/11/3-tips-for-making-your-dream-of-owning-a-home-a-reality-infographic/
Contrary to popular belief, you do not need a social security number in order to secure a mortgage. You can qualify for a mortgage with an ITIN number as long as you meet the requirements for the loan. This means being able to prove that you have a solid credit history, stable employment, and US-based assets. Portfolio Lenders If you do need to apply for a mortgage without a social security number, you will not be able to secure a Fannie Mae, Freddie Mac, or FHA mortgage, but there are plenty of other options. It is not the law that requires you to have a social security number; it is the preference of these lending institutions. There are plenty of banks out there that offer loans to borrowers that are not citizens of the United States. Credit is Important Your credit shows a lender whether or not you are financially responsible. If you are not a citizen, yet you have established credit, you could secure a mortgage. ITINs allow aliens to secure many different types of accounts including credit card accounts. If you were able to secure a few credit card accounts or even a personal loan through the bank that you have a bank account through, then you have a credit score. If that credit score is good, then you could be eligible for a mortgage in the United States. Bank Accounts Help As you probably know, not every mortgage program requires that you have assets, but they definitely help. This is the case for mortgages for people with an ITIN number. A bank account is something you can obtain without a social security number, so if you have one and can show the lender the last 12 months’ worth of bank statements, it will make your position to get approved better. The more assets you have, the more likely it is that you will be able to pay your mortgage, which lowers your risk level as far as the lender is concerned. Assets also help when it comes to the down payment. Generally speaking, you can get a mortgage with as little as a 3 percent down payment, even if you are not a United States citizen, but many banks will prefer a larger down payment. The more money you put down, regardless of the program, the lower your risk becomes, which helps the lender want to approve you for a mortgage. Employment History Your employment history in the United States plays an important role in the approval of your loan with an ITIN as opposed to a social security number. You have to be a part of the United States Immigration System and/or be working on a US permit. You also have to have a 2-year history. Some programs allow a little leniency when it comes to the 2-year job history, but for aliens wanting a mortgage in the United States, the 2-year history is required. Alternative Credit Even if you do not have adequate credit reporting under your name, but you have alternative credit, such as utility bills, phone bills, or insurance payments that you can prove the timeliness of, you can use that as your alternative credit. The lender will ask for proof of at least 12 months’ worth of payments made on time in order to determine your level of risk, but this is a good alternative for those immigrants that do not have credit established here yet. Higher Interest Rates The one thing you should keep in mind with getting a mortgage with an ITIN number is the interest rate. Chances are the rate you will receive is going to be higher than the rates for citizens of the United States, simply because of the level of risk this loan poses. The lender is taking a chance on you even though you do not formally live in the US. Yes, you have factors that show that you qualify for the loan, including steady employment, but there is still a level of risk there that the lender has to take into account. If you have an ITIN number instead of a social security number, there are lenders out there willing to lend to you. It might take a little more searching and plenty of work, but in the end, you will get the loan you need to become a homeowner in the United States. web: October 24, 2016 By Justin McHood https://www.blownmortgage.com/can-qualify-mortgage-itin-number/
Make a list The very first thing you should do together makes a list. There is a chance that you are both on different pages. Make sure you are able to compromise on the features. It’s best if you each make your own lists and then compare them. This way you can determine the features you both want and those that may need a little compromising. The next step is to prioritize. Once you narrow down your list, write down in order the features you ‘have to have’ and those that are negotiable. This way when you shop for a home, you have the features that you can’t live without and those that are a ‘bonus’ if you are able to get them. Check on Your Finances Chances are that you are going to need a mortgage to buy your home. If this is the case, you need your finances in order. If you are unsure of the status of your credit or that of your spouse, pull a copy of your free credit report from each of the three bureaus. This way you can see where you stand. Do you have bad credit that needs some fixing? Do you have too many debts outstanding? Are there errors on your credit report? This is the time to work on these issues. You want your credit score as high as possible when you apply for a mortgage. Remember, lenders use the lowest middle credit score between the two of you. Even if your credit is great, but your spouse has some credit issues, the lender will likely use your spouse’s credit, which could mean trouble. Working on your credit ahead of time can help offset any of these issues. Save for a Down Payment Unless you move into a rural area and qualify for a USDA loan, which is for low to middle-income families, you’ll need a down payment. The FHA requires at least 3.5% down and Fannie Mae requires 5% down. Of course, the more you put down, the lower your payment and the more equity you have in the home. Lenders often give lower interest rates to those that invest in their own homes too. You’ll also need money for closing costs. Estimate approximately 5% of your loan amount for closing costs. This could mean several thousand dollars, so don’t overlook the need to save for the closing costs. You may be able to negotiate some of the costs, but you will inevitably still pay quite a bit in fees. Get Pre-Approved for a Mortgage Now it’s time to get pre-approved for a mortgage. This could be the tricky part. Hopefully, by this point, you and your partner have straightened out your credit. You should also make sure you both, or at least one of you, have stable employment and income. If you don’t need income from both spouses to qualify for the loan, you can use just one. This helps if one spouse has bad credit and no income – there’s no reason to put that spouse on the loan. You can always have him/her to the title later on down the road. For now, though, your focus is on getting the mortgage. It’s a good idea to check with several lenders. This way you have offers from different banks and you can compare them. Some lenders offer lower interest rates and fees than others. Make sure you read the fine print and know the terms of the loan, though. Do Your Research Once you know the type of home you want, the features it should have, and the amount you can afford, it’s time to start shopping. We recommend that you start on the internet. Do your research on various areas. Where do you plan to live? Do you plan on having children? Do you need to be close to the highway? You can look for neighborhoods with the features you need and probably even read reviews on each area. This way you go into the actual home search knowledgeable and ready. Start Shopping Finally, it’s time to shop. We recommend that you work with a licensed real estate agent so you can get the best chance at the hottest listings. If you are buying in a seller’s market, it means there are a lot of buyers and possible bidding wars. Don’t let yourself get caught up in the emotions of the process. Take a step back and truly think if this home fits your needs. If it doesn’t or you lose the bid, there are other homes out there. The most important thing to do while searching for a home is to have patience. The right home will come along. Remember, this is one of the largest investments you’ll make in your lifetime. It’s not something you can return at the store if you don’t like it. Make sure you are happy with the home and feel comfortable with the mortgage before you sign on the dotted line. Source: https://www.blownmortgage.com/home-purchase-tips-newlyweds/