6 Things You Must Know BEFORE You Start Looking for a Home

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Before you start looking for a home, you must get "Pre-Qualifed" for your loan; Banks, Credit Unions, and Mortgage Brokers are where you would go for consultation and application. They will take the loan app., process your supporting documentation and issue your pre-qual or pre-approval letter for the real estate agent presenting your offers to purchase the property.

1. 
   
   How much Down Payment/Closing Costs will I need? In our Current Market, Down Payment requirements can vary depending on your credit score and debt ratios. Funds required for down payment PLUS closing costs can be anywhere from $1 dollar for VA Entitled Loans,  FHA is still only 3.5% D.P.  +  an average of  1.5 to 3%  for  total Escrow Closing Costs (Seller may opt to pay up to 3% of buyers C.C.'s)
2. What about  Government Grants for Down Payment Assistance you ask?  The State of CA has recently rolled out thru the Federal Government; other D.P. Assistance Programs to aid the low-income owner occupied home buyers in the Golden State.
3. There are several Government Programs that are effective to assit certain buyers with down payment.  Some Cities even offer Grant Money.  Also, another program worth looking into is the calHFA;  or California Housing Finance Agency. Properties that meet their specified criteria for down payment assistance can ease the amount of upfront monies a buyer would need to close escrow.  Please talk with one of our knowlegable Loan Counselors -  we would be happy to explain the programs and options to you!
4. 
   
   Middle Credit Scores from the 3 credit bureaus plays an increasingly important role in qualifying for a mortgage in today's housing climate and economy!  If you have marginal (around mid 600's) or bad credit, consult a Pinnacle Loan Counselor. You may be able to qualify for an FHA loan program or speak with a Pinnacle Loan Counselor who may recommend an inexpensive, low cost and effective way to raise your scores in a relative short period of time.  It's always best to Start Early - checking your credit scores and updating any erroneously reported misinformation that could be dragging down your scores otherwise hindering your ability to acquire the most optimum interest rate.
5. 
   
   Should you select a mortgage with a Fixed or Adjustable rate? The answer to this question is really quite simple; How Long do you plan on owning the property? And where interest rates appear to be trending is a secondary concern to making this decision. If rates are low and stable for the time being, you might want to consider a 5/1 adjustable rate loan that has an initial fixed term of 5 years, then subsequent years it can adjust up or down depending on where rates are at. But if you are in the majority and figure on being in your home at least for next 7 years, a low fixed rate might be the best way to go.
6. 
   
   What is M.I. and will I have to pay this? First off, M.I. Protects the Lenders Interst in your home, and is not, what is often misconstrued, to be protection for the home owner in case of illness or job loss, etc. M.I. is a Loan Requirent for loans with Less than 20% Down Payment and stays on the loan until the value of the home and/or the loan balance decreases to 79.9% or under the current value of the home.

Stay tuned by Subscribing to this Blog for upcoming additional tips and info for First Time Buyers or Move-up Buyers looking to become Better Informed about the Home Buying Process.

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If you have anything that requires a more expeditious response, I can be reached at (714) 595-0400

Thank you,

Tom Purcell, CA DRE Broker #00868646

Pinnacle Mortgage & Realty Group

Anaheim Hills CA

Residential/Commercial Property

www.LowMortgageRatesOnline.com

(714) 921-0887 Off.

(714) 595-0400 Cell