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Ready to Buy?

The first step in getting a mortgage is pre-approval.  The lender checks your credit score, verifies your income and employment, reviews your bank and tax statements, and investigates your assets to make sure that you meet their requirements.

Remember, you don’t have to (and probably shouldn’t) borrow the full loan amount you are pre-approved for.  Instead, stay conservative and look for homes in a price range that will keep your mortgage payments to about 25% or less of your take-home pay for a 15 or 30 year note.

Once you have made an offer on the home, you will apply for final approval.  This takes 30-45 days and will include an appraisal of the home.

As you begin the buying process it might seem you are learning a foreign language with all of the new terminology.  Here is a cheat sheet to help you get started:

Appraised Value: An opinion of a property’s value provided by a trained appraiser.

Clear Title: A home with a clear title has no liens (outstanding debt) or legal questions about the ownership

Closing Costs: Fees paid when ownership of a property passes from the seller to the buyer. These include real estate agent commissions, legal fees and recording fees, property taxes and homeowner’s insurance.  The lender must provide the borrowers a Good Faith Estimate: a written itemized total of the expected closing costs.

LTV: The loan-to-value ratio is the percentage relationship between the amount of a loan and the value of the home. To determine LTV, divide the amount of the loan by the home’s value or purchase price.

PITI: This stands for principal, interest, taxes and insurance–the components of a monthly mortgage payment.

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Our agents write often to give you the latest insights on owning a home or property in the local area.