FAQ

Frequently Asked Questions

Am I ready to be a homeowner?

No one can tell you when you’re ready to become a homeowner. Buying a home is usually one of the biggest purchases you’ll ever make.

The right time buy is when you’re financially and emotionally prepared for the responsibility.

If you can say “yes” to the following questions, then you are on the path to home ownership.

Am I ready to take on a mortgage?
Do I have enough money saved for closing costs and a down payment?
Do I know what my credit report looks like and how it will affect home buying?

Is renting or buying better?

Conventional wisdom would suggest that owning a home is better than renting, however, there are circumstances where that is not the case. Questions you should ask are: “How long do I think I will stay in the home?” and “Is there a possibility I may get transferred at work or in the military?”

There is a break even point and every purchase should be carefully considered.

What is the lender's formula?

Lenders typically using ratios tied to a borrower’s gross income. These ratios are calculated based upon total housing expense which includes items such as your mortgage payment principal and interest, property taxes, homeowners insurance, mortgage insurance (if required) as well as homeowners or condominium association dues. The sum of these items divided by your monthly income provides for what is often referred to as the front ratio (in other words, the housing expense ratio).

For example, if you a payment monthly of:

Principal & Interest $1,234.56
Taxes $123.45
Insurance $100.00
Mortgage Insurance $110.00
Homeowners Dues $150.00
Total $1,718.01

Using the payment above, you would need gross monthly income of $6,135.75 to meet the typical housing expense ratio of 28% which is used by Fannie Mae and Freddie Mac. This is calculated by taking the payment of $1,718.01 / $6,135.75.

There are some lenders who also calculate a total debt ratios which includes all payments on your credit report along with the housing expense. There are other lenders and programs which use a single expense ratio like loans insured by the Federal Housing Administration (FHA) or loans guaranteed by the Veterans Administration (VA).

We always recommend that you work with a mortgage loan professional prior to looking to purchase real estate in order to determine a loan amount that you can qualify for along with a housing payment you are comfortable with.

What do I look for in homes?

Finding a home that suits your needs is a very individual experience which is part of what makes the home buying process so exciting.

Some things to consider are:

How many bedrooms, bathrooms and other rooms do I need / want
Do I want an open layout or a home with a lot of doors for privacy
Do I like to be close to other people or would I like a lot of land or space between me and my neighbor

The sky is the limit when it comes to questions and answers. Most home buyers get a feel for what they want by touring homes online, then visiting select homes to see if they meet the criteria they as individuals are seeking.

Do I need a home warranty?

You always need home warranty no matter where you are located or what you are trying to find.

What should I expect at closing?

Closing is never a fast process but it can be easy and rewarding when it happens. Some things you can expect at closing are signing the last papers, getting the keys and becoming a new home owner.

What is pre-approval?

Pre-Approval is when you apply for a loan to see how much you qualify for to buy a house.

Am I ready to rent?

Everyone is different when it comes to them being prepared for renting or moving out! You will be ready to move out once you have had a job for at least 6 months while being financially stable and make twice the rent per month. It is safe to say that you should have approximately 6 months of rent saved up in the rare occasion something happens with your job and you may need the buffer money!

What should I offer?

The amount to offer on the houses depends on the market prices in the area you are looking at.

Can I ask you for advice?

You may ask any advice at any point! I am happy to help anyone!

faq