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When’s a good time to buy a home? When you need one. Here’s what you’ll need to pull it off.
When’s a good time to buy a home? When you need one. Here’s what you’ll need to pull it off.
Credit- there’s a reason this is the first of the three steps. Your scores ( all three- Experian, Transunion, and Equifax) matter. Get your credit report reviewed by a lender well before you’re out looking for homes. Why? credit reports are good for 90 days and your lender can help you put a plan together if your scores need a boost. At the very least, you should target a 680 score as more loan options become available in that range, and options are a good thing.
Credit- there’s a reason this is the first of the three steps. Your scores ( all three- Experian, Transunion, and Equifax) matter. Get your credit report reviewed by a lender well before you’re out looking for homes. Why? credit reports are good for 90 days and your lender can help you put a plan together if your scores need a boost. At the very least, you should target a 680 score as more loan options become available in that range, and options are a good thing.
Income- are you a salaried W-2 employee, 1099, or commission-based? Each of these requires a different approach to determine your qualifying income. Get a lender to review your income and even verify with your HR department prior to going out shopping. This way, there’s no guessing, so once your file hits the underwriter’s desk you’re bulletproof and the magical sound of a clear-to-close conversation can be had with sellers and agents.
Income- are you a salaried W-2 employee, 1099, or commission-based? Each of these requires a different approach to determine your qualifying income. Get a lender to review your income and even verify with your HR department prior to going out shopping. This way, there’s no guessing, so once your file hits the underwriter’s desk you’re bulletproof and the magical sound of a clear-to-close conversation can be had with sellers and agents.
Assets- this is a fancy way of verifying you have enough cash on hand for your down payment and closing costs. I had a past client who cited his sneaker collection as an asset. Which it wasn’t- unless he sold them and showed proof of funds in his account. As a first-time homebuyer, just be prepared to have between 6 to 10 percent of the home’s selling price set aside for a down payment, escrows, and settlement costs. There are 100% financing options available (such as VA or Non-QM options), but there are potential funding fees or rate premiums (higher rates) that come with them. If you don't have savings, your 401k, Robinhood, and Crypto can also be used to draw down-payment funds. Gift funds from a relative are another option to get you over the asset hump.
Assets- this is a fancy way of verifying you have enough cash on hand for your down payment and closing costs. I had a past client who cited his sneaker collection as an asset. Which it wasn’t- unless he sold them and showed proof of funds in his account. As a first-time homebuyer, just be prepared to have between 6 to 10 percent of the home’s selling price set aside for a down payment, escrows, and settlement costs. There are 100% financing options available (such as VA or Non-QM options), but there are potential funding fees or rate premiums (higher rates) that come with them. If you don't have savings, your 401k, Robinhood, and Crypto can also be used to draw down-payment funds. Gift funds from a relative are another option to get you over the asset hump.
Having these 3 things in order will get you through the process as smoothly as
humanly possible. If you’d like to find out more email me at daniel.gajramsingh@gmail.com or text or call at 571-354-9933
(Pre-approvals can be done in 24 hours or less)
Daniel Gajramsingh
Daniel Gajramsingh
Senior Mortgage Loan Originator
NMLS 1659186
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