Getting Financing for Your Dream Home

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Getting Financing for Your Dream Home
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One of the first steps you should take if you
plan to buy a home is to get financing in order.
Many buyers, especially first-time buyers, want
to skip over this step in their excitement to
begin looking at homes. However, you may suffer
much disappointment and many delays if you dont
work on financing first.
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Buyers often justify their inclination to visit
open houses or tour homes without financing in
place because they just want to see whats
available or they are still trying to decide if
they want to buy. What often happens is they fall
in love with a home and end up losing out on an
offer to someone who has already obtained
financing. Another problem is they look at houses
that end up not being in their budget, so
everything they can afford pales in
comparison.Talk to a lender and get pre-approved
before you even think about beginning a home
search. This step will save you heartache and
headaches along the way.
Why Financing First
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• The first step is to be prepared before you talk
  to a lender. Get all of your information together
  and present it at one time. This often helps
  expedite the process and gets you approval
  faster. While each lender will have their own
  specific set of documents which may depend on
  your particular situation, you can expect to be
  asked for the following
• Last two months of paystubs or W-2s
• Last two bank statements
• Previous two years tax returns
• List of all assets and debts

Be Prepared
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The lender will also pull your credit report, so
you should also check it beforehand. You can
request a free copy at annualcreditreport.com,
which will allow you to look for errors. You can
also work to improve your credit if you see
problems before you talk to a lender. If your
credit is good and you provide the necessary
documents, getting approved for financing will be
simple and straightforward.
Be Prepared
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• Numerous loan products exist for the home buyer.
  Its important to know what options you have so
  you can decide which product best fits your
  needs. Since many first-time buyers dont have a
  lot of money for a down payment, they can benefit
  from government programs, such as the FHA loan or
  VA loan. Conventional loans are better for those
  who have a significant down payment, at least
  20, and a higher credit score.
• FHA loan backed by the Federal Housing
  Administration, this loan requires only 3.5
  down, which may be gift funds. You generally only
  need a 620 credit score, and may even qualify
  with a lower score in certain circumstances.
• VA loan designed for veterans, this loan also
  provides a low down payment and credit score.
• USDA loan backed by the US Department of
  Agriculture, this loan is for homes purchased in
  rural areas, but you may be surprised at the
  locations where this loan is applicable. Requires
  a 640 score for most applicants.
• Many programs exist to help with financing, so
  its important to talk to your lender and find
  out whats available. Remember that not every
  lender provides all loan products, which is why
  you should shop around.

Discover Your Options
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Know Your Budget

• Just because you qualify for a certain amount, it
  doesnt mean you want to buy a house for the full
  amount. Your lender will determine your
  debt-to-income ratio, which is the amount of debt
  you have compared to your monthly income. Youll
  be limited to a house payment that is a
  percentage of your total income, such as 28 for
  an FHA loan or sometimes higher for specific
  products or situations. 
• If youre the type of person who likes to take
  vacations, buy the latest electronics, or go
  shopping, you may not want to have a mortgage
  payment as high as what youre allowed. You must
  look at your own budget to determine how much you
  feel you can afford. A good rule of thumb is to
  not increase a mortgage payment too far above
  what youre paying in rent. For those who dont
  have a rent payment, its helpful to practice for
  one by putting aside that amount in savings for
  several months before you buy. This allows you to
  get used to the added expense and start or
  increase your savings at the same time. Lenders
  also look more favorably on buyers with several
  months of expenses in a savings account. Buying
  a home is a fun experience, but only when you
  have the financing portion of the process in
  place. Avoid frustration and delays by talking
  with a lender before you begin your home
  search. 

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• Website http//www.amysims.com
• Amy Sims
• info_at_amysims.com
• 949.559.5959
• Sources
• http//www.bankrate.com/finance/mortgages/6-must-d
  os-before-buying-a-home-1.aspx
• http//www.amysims.com/blog/getting-financing-for-
  your-dream-home