The “rule of thumb” regarding loans is that your monthly housing payment such as the taxes, bills, insurance, mortgage, etc., should not be more than 28% of your income that you receive every month. When it comes to FHA loans, the balance of ration might be higher. The question that remains is, “How much do I need to borrow when buying your Farmington Hills Home?”
Here’s what you should focus on: it all comes down to “down payment”. The higher the amount you have saved, the easier it will be to get a mortgage loan for your Farmington Hills home.
Let’s clear this up for you. Following is some pertinent information that all homebuyers should know about before buying your Farmington Hills home:
Counting Your Savings
As said earlier, down payment plays the biggest role in the home buying process. If you have 20% down payment saved up, then you don’t have to worry about private mortgage insurance. Let’s say that you saved around $20,000 for the down payment. If the home in Farmington Hills, costs $100,000, then you are building equity from the start. However, if the asking price is higher than this, then you will be charged a PMI anywhere between 0.25% and 2%.
All in all, you will be borrowing less if you have the 20% down payment or more. Moreover, the lender will be more open to giving you a loan and at a low interest rate when buying your Farmington Hills home.
When calculating the monthly payments, factor in your debts too. Aim for a house that will cost you less than 28% of the monthly income. This is because you will be paying down your debts, and any missed payment might result in a penalty
Kinds of Houses Are You Looking For In Farmington Hills?
What are your future plans?
Do you see yourself having a family?
How many kids do you plan to have?
What are your aspirations regarding your job in Farmington Hills?
How is your lifestyle?
Questions like these give you a clear perspective of what kind of house you should buy in Farmington Hills. The price of the house increases depending on the neighborhood and the facilities offered within the community. The number of rooms, backyard, driveway and garage also play a role in the price range. Set a margin and tell your real estate agent to stick to it. Be realistic about your needs.
Be Mindful When Borrowing
Don’t bite more than you can chew! Financial stress is the worst and can quickly lead to depression. So, look for a house in Farmington Hills that falls under your budget and amounts to monthly payments you can easily pay.
Now you understand why it is so important to assess your financial situation before making this move. Look for a house that you think you can spend the next 10 to 20 years in. Changing houses within the span of 5 years will financially bankrupt you. If you want to buy a home for sale in Oakland County, Michigan, that falls under your budget and has all the features you need, then visit Homes2MoveYou.
Buying a house is everyone’s favorite “American Dream”. People save for years, so that they can live comfortably and secure their future. Today, the real estate market is quite unpredictable. The demand is on high and the supply is less. Sellers are facing too much competition and are taking different tactics to market houses.
The current real estate trend requires you to do your homework before browsing the market. Jumping the gun will cost you extra and unbiased advice from friends and family. This might force you to take the wrong decision, which is why it is important to proceed with the home-buying process with a real estate agent by your side.
So, before buying a house, ask yourself the following three questions:
Q1. Why Have You Decided Now in Buying a House?
For a minute, set aside your finances and focus on the other reasons of why you are buying a home for sale in Oakland County, Michigan.
- You no longer feel safe in an apartment.
- The landlord is unbearable.
- Has there been a new addition to your family?
- The school in the area is not good enough for your child.
- Some of the facilities available nearby were shut down and now you are having trouble.
- Your job changed and commute is hard to get here.
Narrow down the reason behind the buy and then you will be able to evaluate its seriousness. Making a huge decision such as buying a house is not something you should do on a dime.
Q2. Is the Real Estate Market Going to Crash?
The housing market right now is buyer-friendly, which gives you the opportunity to buy a great home for sale in Oakland County, Michigan within your budget. This window is quite important and must be one of the reasons behind why you are buying a house. In 2017, the housing market went up by 5.8% from 2016. Right now, the market is stable but according to the National Association of Realtors (NAR), it will reach alarming levels by the end of this year. So, unless you want to look for change under your couch cushions, better check out the real estate market trend before buying a house.
Q3. Is the Mortgage Affordable for You?
The house-buying process can become quite confusing and difficult, if you are not working through a real estate agent. The long term cost is something that will haunt you even after years of buying the house. Even a 0.5% increase in the interest rates can set you way back on the monthly payments. This is why it is important to consult different lenders and find the perfect mortgage loan plan that you will be able to pay within 20 to 30 years and without going into debt.
Our final word of advice is that if you feel it is the right time for your family and you to buy a house then you should go for it! If you want to buy a home for sale in Oakland County, Michigan that falls under your budget then visit Homes2MoveYou. Get in touch with a me directly 248-790-5594 and start seeing houses in areas of your liking.
It seems that the biggest hurdles and worries for penitential home owners is the down payment on a home, leaving potential home buyers feeling defeated in the first steps to moving and getting their own home. The potential home buyer still believes that it is the 20% traditional down payment that is needed to secure a mortgage and to purchase a home. This way of thinking and believing can stop any potential home buyer from even taking the first step into becoming a homeowner, but this has changed and many potential home buyers are unaware that the traditional days are long past us.
Down Payment Changes
Times have indeed changed for most potential home buyers, depending on your credit worthiness and other factors the 20% down day’s area thing of the past. Many potential home buyers are able to get a mortgage for a new home with not 10% down payment, but as low as 6%. That’s right, in 2017 over 61% of potential home buyers made a 6% and sometimes less down payment on their new homes according to National Association of Realtors’ Realtors Confidence® Index. Not only that, but I have seen in recent months new homebuyers getting down payments as low as 3%. For potential home buyers this is reason to celebrate.
Low down payment mortgages such as FHA and others have paved the way for potential home buyers to realize the American dream of home ownership without having to stash away and struggle with trying to save up to 20% on a down payment for their first home. This is good news for a whole new generation of potential home owners that were concerned and stressing about a large down payments in order to be able to purchase a new home.
The Take Away
If you have been unable to save up to 20% for a down payment, it’s time to start talking to some lenders to determine the right situation for you. Your dream of home ownership without the stress of depleting your savings or having enough for a down payment is awaiting you. I know some great lenders that I can suggest to you. Give me a call 248-790-5594 or Contact Me
Credit behaviors and credit ratings are generated by three major credit agencies (Experian, Equifax, and Transunion). They all use a differing formulas to generate a numerical rating that reflects your credit risk. The higher the number, the better the credit rating. Certain things may have a adverse effect on your score and could possibly result in you getting turned down for a mortgage. Below are advice for potential Farmington Hills home buyers on credit behaviors that impact the ability to get a loan.
Credit Behaviors That Impact The Ability To Get A Loan
Missing payments demonstrate poor credit behavior and therefore will reduce your rating. The number of months you are late (30, 60, or 90+ days) and how many times you are late also play a role. Late payments stay on your credit profile for an extended length of time.
If you are really behind on payments and a credit provider has given up on their own procedures to retrieve money from you, they may move your debt to a collection company. The collection company notifies the credit agencies. The history will show in your credit file even if you pay off the debt.
If a lender is unsuccessful in obtaining the complete balance that you owe to them, they may “charge-off” the the leftover balance. This could occur if you entirely fail to send payments or if you settle for a payoff below the remaining owed. Settlements reflect on your credit file for seven years. Future lenders will see this item and assess whether you will continue with that behavior.
Publicly Recorded Offenses
Bankruptcy, tax liens, judgments, foreclosures, and other legal matters are recorded into public record. Regardless of whether you settle those items, the actual recording is reflected in your credit report. Certain things remain for seven to ten years whereas others (i.e. liens) will never be cleared. Obviously, it is critical to avoid letting accounts get this far.
Advice For Potential Farmington Hills Home Buyers
All of the credit behaviors that impact the ability to get a loan noted above make you a risky client and may cause higher interest rates or completely prevent you from getting approved for loans. Practice conscientious payment patterns and it will save you time, money, and disappointment when it is time to buy a home. These are the best advice for potential Farmington Hills home buyers. Remember that this details only a few typical credit mistakes. Speak with a financial professional for guidance on your specific situation.
A Mortgage, It’s a big decision: Taking on a monthly mortgage payment is no small matter. That payment will probably become a homebuyer’s biggest expense. And what if you can’t pay on time? Get sick? Lose a job? Divorce? You could see your credit score plummet.
But there’s another side to taking on a first mortgage loan. Not only does such a loan allow a renter to become a homeowner—that mortgage also brings with it several financial benefits, everything from big savings at tax time to a boost in your credit score.
If you’re debating whether it’s time for a mortgage loan—or know someone who is—peace of mind comes from understanding the benefits of that loan.
Mortgage interest deduction
Tax time is no fun. But if you are paying off a mortgage loan, your tax bill might become smaller. That’s because the interest you pay on your mortgage loan is deductible on your income taxes. You can deduct the interest on up to $1 million worth of home-mortgage debt, whether that debt has helped you buy a first home or a second one. You can only claim this deduction if you itemize your taxes, and you’ll have to determine if it makes more sense to take the standard deduction. But for many new homeowners, the mortgage-interest deduction is a welcome financial relief at tax time.
The power of equity
When you pay down your mortgage loan, you build up equity. For instance, if your home is worth $250,000 and you owe just $150,000 on your loan, you have $100,000 worth of equity in your home. You can tap into that equity through a home equity loan or home equity line of credit (HELOC) to fund anything from home repairs to college tuition to a cruise around the world. Interest on equity loans of up to $100,000 is also tax deductible. Just make sure you pay your home equity loan or line of credit back on time; if you don’t you could lose your home.
A credit boost
You might never pay your insurance bills late. You might never miss a utility bill or a cable payment. But these regular payments most likely won’t boost your credit score. That’s because they aren’t reported to the three national credit bureaus, Equifax, Experian and TransUnion. And only TransUnion and Experian have begun collecting rental payment information. But one payment that is always reported to the credit bureaus? Your monthly mortgage payment. If you continually pay this bill on time, you can watch your credit score rise at a steady clip. And today, having a high credit score is a necessity when you want to take out additional credit at low interest rates.
If you rent, your landlord can raise your monthly payment whenever your lease comes to an end. If you take out a fixed-rate mortgage loan, though, your monthly payment will fluctuate only slightly over its lifespan. That’s because your principal and interest payments are set when you take out a fixed-rate loan. All that can change is the amount you pay for homeowners insurance and property taxes, which is why your mortgage payment might rise or fall slightly during its life. This gives you more control over an ongoing, large monthly expense, and can make budgeting an easier task.
[callout type=”center” title=”Pre-Approval” message=”Learn More About Pre-Approvals” button_text=”Get Pre-Approved” button_icon=”align-center” circle=”true” href=”http://homes2moveyou.com/what-is-a-pre-approval/” target=”blank”]