Looking to purchase your first home?
Excited to move into your new house,but unsure about what lies ahead making one of the biggest financial decision of your life.
If Yes is your answer, of course, it’s a yes. We know purchasing your first home is filled with important decisions and there is probably lots of unproductive information being thrown your way that is not customized to your needs.
If you need the tailored help personally customized to your needs you can always call us at Hypotec.
“It boggles my mind when I read all the inaccurate information out there concerning mortgages,” expresses Freddy Abitbol, a leading mortgage lender in the United States for the past 11 years.
“The best advice I can give my clients is to do your homework,” he continues. “Education is the cure to anxiety and when you know and feel confident with what you are doing, you will make better decisions. I can’t tell you how proud I get when my clients call to tell me that because of the education they received from us regarding the mortgage process, they felt more confident with the transaction”.
What does a first-time homebuyer need to know before purchasing a property?
Here are some of the key checklist we recommend at Hypotec to help customers get their desired home.
1. KNOW YOUR CREDIT SCORE
Your credit score indicates the risk a lender is taking when dealing with you. Ninety percent of all financial institutions in the U.S use a credit-scoring model known as FICO. A FICO score ranges from 300-850 in which a higher number indicates a lower risk. This means you will most likely be eligible for credit at a lower interest rate. What constitutes a good credit score, however, can fluctuate. Basically, the lender evaluates the consumer against shifts in the economy. “A simple tip I give my clients on improving their credit score is to avoid applying for a new credit card a year before you apply for financing. This improves your chances of qualifying by possibly improving your credit score,” explains Abitbol. “It is very beneficial to borrowers to find out what they can qualify for before they start house hunting. This saves lots of time and energy,” confirms Abitbol.
2. KNOW YOUR DEBT-TO-INCOME RATIO
You will need to figure out how much house you can realistically afford. For illustration purposes, if you are looking for a conventional loan, most often, you want the home expense not to surpass 43% of your gross monthly income. You will need to know your debt-to-income ratio before starting the process of buying a home.
3. SET ASIDE THE MONEY FOR THE DOWNPAYMENT
Your credit score determines how much down payment you will be required to put down. With exceptions of veterans, everyone has to put down a down payment. By calling a lender, you can find out how much down payment is required for your situation.
4. FACTOR IN LOAN FEES
In general, closing costs depend on:
The lenders’ underwriting fee
The title company fees which include the title settlement charges and the title insurance
The recording fees
“There is no exact way for a borrower to figure out these loan fees on his or her own because it depends on your credit score, the loan-to-value and the state and county in which you live. The best and most accurate way is to call a lender and find out the costs. I encourage all my clients to shop around,” confirms Abitbol.
Purchasing your first home is an exciting time and you should enjoy every moment of it. Make sure you are well informed on all aspects of the process before starting. Be sure to run a full check on the lender you choose with the Office of Financial Regulation (OFR), the Better Business Bureau (BBB), and Nationwide Mortgage Licensing System (NMLS).
Freddy Abitbol is president of Hypotec, a mortgage lending company for over a decade. With excellent ratings with the Better Business Bureau, and a stellar record with the Nationwide Mortgage Licensing System (NMLS) and the Office of Financial Regulation (OFR), Hypotec is a proven leader in the mortgage industry. Freddy Abitbol can be reached at 1.866.950.4625 ext. 2222.