how much can you afford

DOING THE MATH
How much can you afford when buying a home in Pierce County? Know the answer to this before browsing online. Beautiful homes and/or great opportunity can be really persuasive and the reality is, you don’t want to leave yourself disappointed when you realize your dream home is (for now!) out of reach. Crunch the numbers FIRST and I promise you will be happier and more satisfied in the end.
GETTING A LOAN

INCOME. ASSETS. LIABILITIES. CREDIT SCORE

There are many different loan types. All of them require verification of your income, assets, liabilities and credit score. After this information is gathered from the lender (before you start shopping) it will become clear what loan type is best for you. High Credit Scores, consistent work history and sizable downpayment (20%+ down payment) are favored and likely result in a better interest rate compared to lower down payment or riskier loan types.  Explore all of your options and interview several lenders to assure you are confident, moving forward with the licensed loan officer and loan type. 

Also note, that you may discover something about your credit score or otherwise that you didn’t know! This can happen and is all the more reason to partner with a lender sooner rather than later, so your plans of investing in a home aren’t set back.

HOW MUCH TO PUT DOWN

DOWN PAYMENT

The amount of money that you have dedicated to go towards a down payment is usually what dictates the loan type you will use. If you are active or retired Military, using your VA benefits is almost always the best options (0% and no PMI – amazing. Also – thank you for your service). Look at your overall loan qualification as a risk assessment. A traditional  conventional loan is one that buyers generally use who have higher credit scores and a larger down payment. Buyers are motivated to pay 20% or more as a down payment so they are not charged Premium Mortgage Insurance (PMI). FHA is utilized by first time home buyers with little or no money down. You do have to pay PMI when using an FHA loan and the monthly amount varies based on the home, location and borrower qualifications.
GETTING QUALIFIED AND APPROVED

PREQUALIFIED VS. PRE-APPROVED

After you determine what loan type you’d like to use, get it done! Many lenders have the option of collecting ALL of your required documentation up front (W2’s, taxes, income, debts, bank statements – basically everything but a blood sample!) Do this so you can outcompete other buyers with your guaranteed or (as industry professionals say) fully underwritten approval letter. You will thank yourself for it – I promise.

Let’s Start Something new
Say Hello!

Have a question about the market? Or maybe you want to sit down and talk about the possibilities of buying or selling a home… either way, fill out the information below to contact me and I will be in touch with you!