Buyer(s) to do list

Steps to buying a house

  Notice: The amount or rate of real estate commissions is not fixed by law. They are set by each Broker individually and is negotiable between Buyer(s)/Seller(s) and Broker (real estate commissions include all compensation and fees to Broker).   

• Use a mortgage calculator to see what you can actually afford, remember to include P.I.T.I. Principle, Interest, Taxes and Insurance in your monthly payment calculations. It's recommended to get an impound/escrow account with your loan to combine everything into one monthly payment so you don't have the stress or worry about different payments (Taxes & Insurance), and you capture the true cost of home ownership. Also, don't forget to account for any Home Owners Association H.O.A., Community Facilities District (CFD), Mello-Roos, or any other applicable fees. Interest rates change and vary depending on your credit score, down-payment, loan type, etc.
  

• Contact an insurance company to get a quote on homeowners insurance for the type of home/property you're considering on purchasing. Your current car insurance company should be able to help with this.
  

• Lenders/Banks want to see the last two years of your job history, preferably in the same industry/job, W-2, paystubs, etc.
  

• Your last two years of tax returns, all income and deductions.
  

• The last three months of bank statements for both savings and checking accounts, any retirement accounts like a 401k or any other assets that you can use towards your net worth e.g., Paid off vehicles, stocks and savings bonds, gold and silver coins/bars, crypto-currency etc.
  

• Unfortunately banks are also looking for any credit accounts & loans to check your debt to income ratio.
  

• Payoff existing debt, credit cards, personal loans, student loans, car loans, medical bills, any collections you may have or any other debts owed that reflect on your credit report, like any outstanding tickets: parking, speeding or any other offenses. Keep records of all paid debts, even settlements or payment agreements made between you and any creditors for proof. Also very important, do not close any credit card accounts or charge accounts once you do pay them off, you want to retain your credit history for those trade lines, just don't add new debt to these accounts or any others for that matter. Keep your debt/credit closed to any new debts so you can qualify for your home loan (Wait to buy that new car/truck/suv until after you buy your home, not before).
  

• Start a savings account solely for the down payment and closing costs for the purchase of your home. How much should you save? A good figure is at least 7% (3.5% Down payment FHA Loan & 3.5% Closing costs/fees) of the sales price, these figures vary depending on the loan program you choose to use for your purchase, it could go up to 20%+ on a conventional loan or down to 0% on a non-conforming loan. Do your homework to see what the requirements are for all the loan programs that you may qualify for and compare how they benefit you. Some offer low down payment but require a mortgage insurance premium which raises your monthly payments and only benefits the lender, not you (But can offset a huge down payment, do the math). Comparing the details of each loan program can be overwhelming but it can help you secure a good loan with reasonable terms and conditions with minimal to no down payment, depending on your efforts and the lender/bank you choose. Not all lenders are the same, one might have a loan program designed to help you, just check out the terms and conditions.
  

• Get Pre-Approved without cost or obligation to run the scenario by the bank/lender, and if they don't want to help you out, then that's not the right lender for you. Just be sure to mention to them that you already have a Realtor/Real Estate Agent that you're currently working with, Me, Realtor Eddie. I'm knowledgeable on most of these programs, however I am no longer a loan officer (I'm a Realtor/Real Estate Agent), so if you have any questions or need a recommendation, feel free to contact me.
  
  

Contact me if you have any questions but more importantly once you have your loan approval letter from your lender/bank (With underwriter approval, "ask you loan officer") stating that you're ready to buy a home, then we can start shopping for a house. Thank you for choosing me to help you fulfill your American Dream!

Eddie Lugan

California Real Estate Agent/Realtor – Since 2005

DRE License#01513183

Realty Source, Inc.

EddieLugan@yahoo.com - Email

760-583-2845 Cell