Your Home Buying Checklist

Are you a home buyer in Pinellas County, Florida
  1. Separating your wants -vs- your needs.

Here are a few tips for home buyers that are shopping for houses. How to narrow down your search.

  • What do you need in a Home?
  • What do you want in a Home?

Before you even start shopping think about what you actually need in the home for you and your family. There is a huge difference in what you want compared to what you need. If you work from home all the time you may need a home office. If you work from home once a week you can also say I need a home office. Is a home office really necessary if you only work once a week from home? The bigger the home, the more expensive, so it helps to break down needs versus wants.

Arona McGinley Realtor in Tampa florida

2. Be realistic about your finances

Look at your finances, determine what you can afford to spend monthly for your mortgage. Do you have money for a down payment? Do you have money for escrow? This will determine what price range of homes you can afford.

3. Talk to Lenders, get pre-approved.

This is a letter from a lender that you give to the sellers to show that you are serious about buying their home. It says that the lender is committed to lending you this much to purchase their home.

Once you determine that you are ready to be a homeowner talk with a Realtor about market conditions. This is one of the biggest investments don’t just wing it.


Why is the Appraisal so critical to your real estate transaction?

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Did you know that the appraisal can make or break your real estate sale? The appraiser works for the bank, not the seller or the buyer.

In real estate transactions, we have 3 significant players – the buyer, the seller, and the lender. The Appraiser is the eyes of the lender in the field. An Appraiser plays a vital role in every real estate transaction.

For example, we have a real estate transaction of a sale price of $300,000. The buyer is putting 10% down which is $30,000. He is getting a loan in the amount of $270,000. Everyone so far thinks this home is worth $300,000, obviously, the buyer thinks this because he made an offer for the sale price of $300,000.

The lender now sends the Appraiser out to the home to get an appraisal of what the home is worth. Here is where it can become pretty tricky. When the appraiser goes out here are a few things that can happen:

  1. The appraiser determines that the value of the home is higher than the sales price, maybe its $305,000 instead of $300,000. This is great news because we can go ahead with our transaction.
  2. The appraiser, appraisers the value of the home at $300,000 which is the sales price. Excellent! We move ahead with the transaction.
  3. The appraiser values that home lower than the sales price for example $290,000. This becomes a problem for all parties involved. A couple of things can happen here which is not so great for the parties involved.
  • The Lender can still lend the buyer the money to purchase the home but only for $290,000, not the $300,000 sale price.
  • The seller can either eat the $10,000 and sell the home for $290,000 instead of $300,000. This can sometimes happen, where the seller comes down to the new appraisal price.
  • The buyer can buy the home at $300,000 but would have to bring additional money to the table. You can see this happening in a seller’s market. The loan is now $290,000 with a down payment of $29,0000, the loan amount would be $261,000. The buyer has to bring an extra $10,000 to purchase the home at $300,000.
  • The last thing that can happen is that the whole transaction blows up because neither party is willing to negotiate.

You can see how the Appraiser is vital to a real estate transaction. It does not matter what the buyer or the seller thinks the home is worth. It matters what the Appraiser thinks…that’s what counts!

What is a 4 Point Inspection?

4 POINT INSPECTION

Your offer has been accepted to purchase your dream home, and now you have to set up an inspection to make sure the home is in good condition.

When buying a home, you will have to get a home inspection if you’re getting a mortgage and even if you are purchasing with cash. You want to have a home inspection done no matter what the situation. By having a 4-point inspection done, it lets the bank or the homeowners know the quality of the home that they are purchasing.

A 4-point home inspection includes

  • Foundation
  • Roof
  • Electrical
  • Plumbing
  • HVAC systems
  • Damages caused by termites, flood, fire, and mold.

Any of the above can impact the value of your home. If a home inspection is not done, and later you find out that the foundation is cracked or the roof is rotted, this can be a costly fix for the buyer.

Once something is revealed in the home inspection you can negotiate with the seller for a lower asking price.

Who can do a 4-Point Home Inspection?

  • A Florida licensed general contractor
  • Architect
  • Building Inspector
  • Engineer
  • ASHI Home Inspectors
  • FABI Building Inspectors
  • NACHI Certified Home Inspectors

**A Home Owner cannot do a Home Inspection

Are You Ready To Buy Your Home?

Your guide to buying your first home -

Buying a home can be the most exciting time for you and your family. But don’t lose out on the home of your dreams by doing this alone. This is one of the biggest financial transactions of your life, and I want to help you by making this experience less stressful.

As you go through the process you may have questions on –

  1. Downpayment – How much is required as a downpayment of a home?
  2. How do I get a Mortgage for this home?
  3. How do I complete the Mortgage application?
  4. Do I have enough money saved up to buy this home?
  5. Do I have a good credit score?
  6. How do I write up an offer on my dream home?
  7. How do I negotiate to get the best price?
  8. How do I submit an offer on my dream home?
  9. What do I do when the Seller accepts my offer?
  10. How do I get the home inspected?
  11. How do I negotiate repairs?
  12. How do I get a title search?
  13. How do I get a survey?
  14. What are my closing costs?

There are so many things to think about when buying your home. Don’t go through this alone. Call/Text 727-422-9340 I can help you buy the dream home for you and your family.

Start Building Equity!

FIRSTTIME HOME BUYERS
Buy a home and increase your wealth.  Contact Arona McGinley-Realtor

Are you still renting? Why are you building your landlord’s equity and increasing their wealth?

With mortgage rates being low… this would be a great time to invest in a home. Most people think that they cannot qualify for a mortgage, but you will be surprised. Get with your local mortgage company today and see what options are available to you. Then call me to find you the perfect home that fits within your budget and your lifestyle.

Stop paying your landlord. Every month you pay your landlord, their bank account goes up because they are building equity in their home. Why are you still not a property owner? You could be building equity in your home and increasing your wealth. Don’t hesitate, take the plunge and call me to find your home today.

Home Ownership for 1st Time Home Buyers Tips

Are you a first time home buyer?

When you are ready to buy your home a lender will basically evaluate your overall financial picture as well as other financial factors to see if you qualify for a mortgage. Here are some tips to help you get your loan.

  • Do not quit your job while you are in the process of getting a mortgage, nor change jobs or decide that this is a great time to become self employed.
  • Don’t go out and spend money on huge ticket items like a new car that you would need financing for. If you do this it will increase your debt to income ratio and this then decreases your chances of getting approved for your loan.
  • Do not go on a shopping spree for new furniture to decorate your new home before you close on your home. You maybe tempted if you found the perfect furniture but please hold off on buying any major purchase until after the closing.
  • Do not ….do not lie on your loan application. Do not omit any debts, if you do this it is considered to be fraud to lie on your loan application and you will be denied the loan.
  • Don’t use your credit cards excessively during the process. And please do not forget to pay your bill. Any changes to your spending habits may just prevent you from getting your loan.
  • Put aside money for your closing costs. You can contact the closing company to find out what your closing costs will be.
  • Do not go out and co-sign loans for anyone. This means that you are assuming debt, even if it is someone else that is making the payments. This will also increase your debt to income ratio.
  • Do not make large deposits into your bank account. You may have had an estate sale to get rid of things in your home before you move and made a good chunk of change. Talk to your lender before you deposit that money into your account or any large deposits while you are in the process of getting a loan.
  • Do not change bank accounts during the process of getting a loan. The lenders are looking at your financial stability.

If you are unsure about anything please discuss it with your loan officer

What is a Pre-Approval letter

Why should home buyers have a pre-approval letter before they start searching for homes?

A pre-approval letter is basically a document from a lender that indicates how much the lender would be willing to lend you to buy a home.  By having this letter a seller will view you as being more of a serious buyer when you place an offer on their home.

 

Mortgage Application Tips

Mortgage application tampa bay florida

You have made the decision that you are going to buy a home and you are ready to fill out your mortgage application. Here are some things that you will need when filling out your mortgage application

  • W-2s from the past 2 years.
  • Personal and Business tax returns for the past 2 years.
  • Pay stubs from the past 2 months.
  • Bank account statements from the past 2 months.
  • Proof of other income, example child support, alimony income if using for qualification.
  • Proof of other asserts and Income example collectibles, land, real estate.
  • Other investment statements from the past 2 months

How Much Home Can You Afford? Your Monthly Mortgage Payment Made Easy

afford more house

How much house can you afford? Knowing you want to buy a home is one thing; knowing how much of a mortgage payment you can handle is quite another. Too often, dreams and reality collide: You’re yearning for a four-bedroom Colonial, but given your income and debt owed to credit cards and beyond, the best monthly loan payment you can manage is for a two-bedroom bungalow in a sketchy party of town.

So how do you pinpoint a house where the monthly mortgage payment is financially within your reach, and one that won’t drive you deep into debt? Allow us to help you paint your payment profile picture and find that magic number.

Why your mortgage payment depends on your income

Getting a ballpark estimate of how much house you can afford starts with looking at your income, or how much money you’re pulling in.

“The general rule of thumb is that you can purchase a home that costs two or three times your annual income,” says Harrine Freeman, a financial expert and the owner of H.E. Freeman Enterprises.

So if you’re earning $80,000 per year (and you have a reasonable amount of job security and don’t expect wild fluctuations in your income anytime soon), you can afford a house up to three times that, or $240,000.

That said, income isn’t everything, and this is just a ballpark figure to get you started.

“Tripling your income is only an estimate and does not account for your monthly bills,” says Freeman. So let’s dive into more specifics on what makes your payment pass muster.

Why your mortgage payment depends on your income and debt

Your income is only half the picture of what determines the monthly mortgage payment you can afford. The other half is your debt—meaning the debt you owe to credit cards, college loans, and other credit sources. Even if your income is high, having high credit debt means you have less money to put toward a monthly mortgage.

One way to factor your income and credit debt into how much mortgage you can afford is to follow the 28/36 rule, a simple but effective ratio for mortgage affordability.

The “28″ refers to your monthly housing payment—things such as mortgage, home insurance, and property taxes—which shouldn’t be more than 28% of your gross monthly income (ideally this payment should be less). This payment is easy to calculate, because all you need to do is multiply. For example, if your gross (meaning before taxes are taken out) monthly income is $6,000, you would multiply that by 28% (or 0.28), which equals $1,680—this is the maximum amount of your monthly housing payment.

The “36″ refers to your debt-to-income ratio. This ratio compares your debt, or how much money you owe (to credit cards, colleges, car loans, and—hopefully soon—a home loan) to your income. This ratio should be “no more than 36%,” says Freeman; ideally, this ratio should be much lower.

Think about this ratio in terms of your monthly expenses: If you have a monthly income of $6,000 but also spend $500 paying off credit cards or other debt, you would divide $500 by $6,000 to get a debt-to-income ratio of 8.3%. This ratio is great, but adding $1,680 in monthly mortgage payments would push up your debt load to $2,180 and your debt-to-income ratio to 36%. This ratio is exactly the maximum experts say you can afford. Going past this threshold is a risky move. Ignore this ratio, and you could end up with a house that, over time, could drive you even deeper into debt.

How a down payment fits into the picture

Last but not least, the amount you have for a down payment matters, too. Ideally, to get the best mortgage rates and terms, you’ll want a down payment amounting to 20% of the price of the house. But if you don’t have that much, rest assured you can put down less. FHA loans, for instance, need a down payment of only 3.5%.

Once you know both the down payment you plan to contribute as well as your monthly income and debt, you can easily work out the maximum monthly mortgage payment you can afford—and by extension, the priciest house you should buy.

According to realtor.com®’s Home Affordability Calculator, if you earn $6,000 monthly, pay $500 monthly in debts (pre-house), and can make a down payment of $40,000, if you get a 30-year fixed mortgage at 4% interest you can afford a house worth $277,800. Plug in your own numbers and see what happens!

How mortgage pre-approval can estimate your mortgage payment, too

Another easy way to get a sense of how much you can comfortably pay in monthly mortgage payments is to approach a mortgage lender and apply for mortgage pre-approval. That’s where the lender will take a look at your income, debt, credit score, credit report, and other factors of your financial past to determine how much money it’s willing to loan you to buy a home.

Note: If you’re not sure what your credit score is or why it matters, here’s a quick crash course: A credit score is your track record paying off past debt you’ve had on credit cards or college loans. The better your credit score, the better your odds of landing a great mortgage. (You can check your credit score for free at CreditKarma.com.) If your payment to debt sources has had some rough patches via late or missing payments, this could stand against you. The good news? If you take care of past debt and make your monthly payments on time, you can improve your credit score over time.

Mortgage pre-approval doesn’t just tell you exactly how big your monthly mortgage payment can be. As a bonus, pre-approval also makes you a more attractive buyer to home sellers, since they know you have financing to back up your offer.

Beyond your monthly mortgage payment: What else do you have to pay?

In addition to your down payment and monthly mortgage payments, you’ll want to budget for some other costs. The big one is closing costs, which are fees related to processing your loan that can range from 2% to 7% of your home’s price. Closing costs aren’t paid monthly; rather they are due at closing, when you get your keys. So make sure to set aside enough money to cover this sizable expense!

The other big ongoing expense to factor into your monthly budget is property taxes. Property taxes are often folded into the monthly payments you’ll find in a mortgage calculator, but they’re worth examining as a distinct factor since they vary greatly by area. So, you’ll want to check property taxes carefully. You can typically find the exact amount (or an estimate) of the property taxes you’ll pay on real estate listings, or by entering your address into an online home value estimator.

One final housing expense to keep in mind is homeowners insurance. This is also factored into payment estimates made by realtor.com’s mortgage calculator. One ballpark payment to keep in mind is that the average annual premium costs just shy of $1,000. This payment will vary by area and home, too. You can often break up this payment into small monthly installments so you won’t feel the pinch quite so much.

Add it all together = How much house you can afford

Once you’ve determined how much you can afford as a monthly mortgage payment, you can confidently embark on your house hunt!

Having a certain mortgage payment ceiling in mind, based on concrete numbers like your monthly income and debt, means you won’t end up busting your budget. You can choose a house that fits comfortably in your payment profile, so you know you can handle the monthly bills with ease.

If you find your monthly income and mortgage budget aren’t enough to snag the type of home you want, you’ll have to start weighing what you absolutely must have in your home—and what you’re willing to sacrifice if necessary.

Use the “pick 2″ rule: payment, quality, location. Typically you can prioritize two of those categories, but not all three. Your best bet is to stick to an amazing neighborhood for an amazingly low monthly loan payment, and know that your home might not have that pool, wine cellar, or other amenities you’d hoped for.

These trade-offs are just the reality of scrounging together enough of a payment to manage a mortgage and a house without getting sucked deep into debt—so don’t be disheartened.

If your monthly payments are falling short of your dream house, try widening your search to different neighborhoods or knocking a few items off your must-have list until you find the location and amenities that best fit your budget. Weigh what really matters for your dream home, then start performing preliminary searches online using sites such as realtor.com. And try to stay optimistic!

With enough searching and some luck, you can find a dream house that not only has all the features you want, but also meets your payment profile—from your income to debt to credit score and more.

Article from Realtor.com

Financing Your New Home

The whole home buying process is filled with head-scratching questions, but most particularly when it’s time to choose a home loan. To help clear up the confusion, here are some of the most common mortgage questions home buyers ask—and experts’ answers.