Today’s marketplace can be daunting for property buyers,especially those buying from overseas! Your new home purchase is likely to be one of the most important decisions you’ll ever be likely make.

You may not yet have realized, but when buying in Florida time is of the essence! Property contracts have time restrictions on them. If you have over-estimated on how much you can borrow and your finance does not cover the property sales price you are in deep water! The seller (depending on contract contingencies) can look for a new buyer and walk of with your cash deposit in their pocket! You can easily prevent this from happening...

Where Do I Start?

Don't invest hundreds of hours searching on/ offline only to go through heartbreak if you find yourself unable to qualify for your dream home... get your finances sorted... before you even look at property. A lender can perform a simple verbal prequalfication in about twenty minutes and a full-fledged preapproval in a few days. This will clarify what you think you can afford with what you can realistically afford!

Pre-qualification is not the same as Pre-approval!

Pre-qualification

Is a free “dummy” run of the loan application process that usually takes a few hours. The mortgage lender uses your credit, financial, and employment information to come up with an estimate of the mortgage you can realistically pay back!. While it is a good first step to give you an idea of where you stand, and can help with planning for homeownership, a pre-qualification is only a rough estimate. When you are ready to purchase, take the time to get pre-approved. While it is a lengthier process, it is worth it.



Advantages of Pre-Approval

Pre-approval gives you an excellent idea of the type of florida mortgage you will qualify for and more importantly the price range of homes you can afford.

It can help you:

1. Know upfront how much you can borrow.

2.Confirm your ability to qualify for a mortgage based on

• Your credit.
• Financial information.
• Employment information.

3. Strengthen your stance to make an offer on a house. Sellers are usually more willing to accept offers from pre-approved buyers!


To get pre-approved, you'll need to work with a mortgage lender. They will review your credit, financial, and employment information after you fill out an application and provide documentation. A fee may be asked to cover the application costs. However it is common to have this refunded at closing.


Once qualified, you'll get a letter stating you're approved to borrow a certain amount of money over a certain amount of time. Bear in mind pre-approval does not mean you have to use that lender or that the loan has been finalized.


Pre-approval not only allows you to focus your search in the correct price range, saving a lot of wasted time and frustration, but it can also give you head start when competing with other offers on a home that you find. If a seller is deciding between two offers:

• YOURS- which has been qualified.
  
  
             OR
  
  
• Another unqualified offer.

They are much more likely to pick yours. Pre-qualification also gives you leverage when negotiating with a seller in a non-competitive environment, it essentially makes you a cash buyer!  The amount of home that you qualify for will be determined by three key factors:

1. Your down payment.
2. Your ability to qualify for a mortgage
3. Closing costs.

The Down Payment

A current homeowner can rely on equity from their home sale, however a first time homebuyer is limited to the money they can save. The days of having to put 20 percent down on a home are in the past, although putting a large amount of money down definitely makes it easier to qualify for a mortgage and to get the lowest interest rates available. With the various programs that are available today, you can put as little as 3 percent down on a home.



Qualifying for the Mortgage
There are two basic guidelines that lenders use to determine what size mortgage you are eligible for:

1. Your monthly mortgage payment of principal, interest, taxes and insurance should not exceed 25 to 28% of your monthly gross income.
2. Your monthly housing cost  plus other long-term debt should not exceed 33 to 38% of your monthly gross income.

Specifically, most lenders will consider 4 key factors to determine your ability to qualify for a home loan:

1. Income – This first element can include not only your gross monthly income and secondary income (commissions, bonuses) but also your history of employment, stability of income, education, even potential for future earnings.
2. Credit History -- This encompasses your history of debt repayment, total outstanding debt, highest balance, and your highest monthly debt balance. You can check your credit score for free at any of the 3 major credit scoring agencies,
   
   
   
   • Experian
   • Equifax
   • Transunion
3. Assets – Your assets consist of cash on hand, savings and checking accounts, CDs, stocks, bonds or any other type of liquid asset
.




4. Closing Costs - Keep in mind that in addition to your down payment, you will also be responsible for paying fees for the loan and closing costs. These will be required at the time of closing unless you qualify and choose to have these included in your financing.

More On Closing Costs

Generally will range between 2 percent and 6 percent of the mortgage loan, depending on the loan and lender. You will be provided with a "Good Faith Estimate" of closing costs so you can know what to expect.

• "Points", which are one-time charges equal to one percent of your loan amount, may be required by your lender at closing.
• Your closing agent will charge a fee at the close of the sale.

Any ?'s On Florida Property Costs Just Contact Us