What Every First-Time Homebuyer Should Know

Getting approved for a mortgage shouldn’t be a worry: It’s all in the preparation BEFORE you make an application.

There are 3 key points you need to pay attention to: Credit, Income, and Assets.

Watch our videos on credit, get your scores up and keep your monthly debt payments low. The higher your score, the lower your mortgage cost will be, the more house you can afford.

A simple $500 a month car loan can reduce your mortgage buying power as much as $117,000! So, buy the new car AFTER you buy your house.

If you’re a W2 worker we use 45% of your GROSS monthly income to cover your monthly debts and housing expenses, which include real estate taxes, HOA dues, Homeowners Insurance, and the monthly loan payment.

If you’re self-employed, we use 12 to 24-month income average of your NET adjusted gross income. Assets can come from investments, savings and checking accounts, a family gift, or even government aid but not borrowed money.

Currently, total costs (including a down-payment) to buy a $300,000 home in Palm Beach county Florida is about $20,000 with good credit, prepaid expenses, and escrows.

10% Down For Condos With Low Or No Reserves

What’s the big difference between buying a condominium and buying every other type of housing? The condominium approval process.

Did you know that lenders need to answer as many as 50 questions for Fannie Mae and Freddie Mac before they know they can lend on a condo unit? The answers to just one of these questions can dictate the down payment required on your new home.

Here’s the question: Does the condominium budget provide for the funding of replacement reserves for capital expenditures and deferred maintenance at least 10% of the budget?
If it doesn’t then the borrower must put 25% down in order to avoid the reserve question.

If you’re a borrower with limited cash or a seller who wants to expand their buyers’ market, this can kill your sale. But there’s still hope. Fannie Mae allows you to do a first and second combination with 10% down from the buyer and 15% second from a second mortgage holder. This then qualifies as 25% down and the lenders don’t need to worry about the reserve requirement. Fannie Mae sees this as 25% down, so the lender does not have to concern themselves with the reserve requirement. In this way, you can get into your new condo with just 10% down payment.