4 Items To Get A Home Loan
- Good Credit Rating
(FICO Score 500, 600, 700)- 500′s – SERIOUS CONCERN
- 600′s – GOOD
- 700′s – AWESOME
- Income to Debt Ratio
- Lesser of 30% or 40% (Lenders will use whichever results in the lowest number for your total home payment.)
- 30% of your gross income is allowed for HOUSE PAYMENT only.
- 40% OF YOUR GROSS INCOME is allowed FOR HOUSE PAYMENT and ALL OTHER DEBT, i.e., car payment, credit card, etc
- 2 Years In Same Line of Work
Includes Time In Specialized Training (same as your current line of work) - Ca$h to Close
- 0 to 3% Downpayment (or even more is better)
- Closing Costs – i.e. appraisal, survey, home inspection, title insurance, recording fees, all non reoccurring expenses
- Pre-Paid Items: Contributions toward normal reoccurring expenses such as real estate taxes, homeowners insurance and prepaid interest from close date to the end of the month.
TOTAL Closing Costs & Prepaid Items = Figure Approximately 2% of Home Sale Price
…and then add your down payment amount selected to arrive at Total Cash Needed to Close.
Keep in mind, lenders allow Sellers to pay your Closing Costs & Prepaid Items, then Total Cash to Close is simply your Down Payment Amount.
Sources of Downpayment Funds
- Special First Time Home Buyer Funds & 100% financing plans allow you to buy with little – or none – of your own money!
- Your own savings
- Gift from parents or relative
- 401K Plans or other Retirement Accounts
- Refund of Landlord Security Deposits
Remember: If Your OUTGO Exceeds Your INCOME your UPKEEP becomes your DOWNFALL!! (Be sure to get YOUR BUDGET TOGETHER!) Consult with your SCHNEIDER Real Estate agent and a preferred lender for professional financing guidance.