Welcome to Real Estate 101 with Pam
I am going to give help on what to do when you are buying a home.
Step 1
Make a rough estimate of how much home you can afford based on your income. The price of your home shouldn't be any more than 2.5 times your annual salary. Your house payment should be no more than your gross monthly income (before taxes and deductions)
Step 2
Take a close look at your credit report. Your credit history is one of the principal measures used by a lender to determine your interest rate.
How does your score rate? Here are the credit guidelines used by Equifax, TransUnion and Experian
Exceptional........ Above 780
Great ........ 740 - 780
Good ........ 690 - 740
Fair ........ 620- 690
Low Below 620
If there are any discrepancies on your credit report, it's important that you contact the rating agencies and have those records corrected. Taking the time to verify and correct your credit report before you speak to a lender will help eliminate hassles later on.
3. Gather your documents and take a look at yor assets and monthly expenses. Your lending institution will ask you to give a complete profile of your financial situation. In addistion to your income, your existing assets and debts will determine how much money that you can borrow.
4. Talk to a Qualified Lender BEFORE starting to look for a home, this will save you alot of time and money by know exactly what kind of payments you will be comfortable with. If you are looking for a qualified and experienced lender I have a list of lenders that I can refer to you.
What not to do when you are seriously shopping around for a home. If at all possible you should avoid making a major purchase or changing you job, these are things that can seriously affect your credit score and therefore jeopardize your ability to buy a home.
For a complete guide to buying a home or for any other real estate questions or comments please contact me, Pam Dykstra, Prudential CA Realty, either by posting back or by emailing me at whitetigerpd1@cox.net.
Full-time and full service Realtor.
