Questions for Home Buyers to Consider; Be Assured of the Best Florida Mortgage Loan

As you prepare to take out your first Florida home loan, there are ways to ensure this is as smooth a process as possible. Consider the following questions, courtesy of Quicken Loans, in order to assure yourself of the best deal:

How Much Can I Afford?
As a first-time home buyer, it’s important to have an accurate idea of how much home you can afford and how much you are qualified to borrow. How do you know what you can afford? Many online Florida home loan lenders offer calculators on their sites which you can use to find out about how much you can afford based on your income and expenses.

Should I Get Pre-Approved, Pre-Qualified, or Qualified?
Pre-qualification and pre-approval mean the same thing for a Florida home mortgage loan. When a borrower provides income information and their credit report is checked, a preliminary Florida home loan amount is given by the lender based on that. However, the borrower may find a house, only to later learn that the amount they were “pre-approved” for wasn’t what they could actually afford.

To fully approve a borrower, a lender will complete the application process by pulling credit and verifying income and assets. The idea is to be fully approved before you shop for a home. That way, you’re in a better position to negotiate because the seller knows that your financing is in place and that your offer is solid.

What Kind of Loan Options Are Available to Me?
A good Florida home loan lender will ask lots of questions to become familiar with your financial situation and your specific needs so that they can fit you with the most appropriate home financing options and explain the process in a way you can understand.

Deciding what Florida home loan is best for you will depend on a few key factors:

• Your current financial situation
• Whether or not you expect your finances to change
• The length of time you plan to stay in your home
• If you are financially able to adjust to periodic changes in your monthly payment

Note, for example, that an interest-only Florida mortgage loan gives home buyers flexibility and allows you to afford more than a traditional principle and interest loan. Because interest-only loans are fairly new in some markets, some people are wary. Make sure you research all loan options before making a decision.

What Documentation Do I Need to Have?
To make the Florida home loan process faster and easier, you should have these items available when you’re ready to complete your application:

• W2s
• Pay stubs
• Bank statements
• Written verification documenting where the down payment will come from

Some loan programs are more flexible and require less documentation, so if you are self-employed, work on commission, or have difficulty documenting income you do have other options for processing your Florida mortgage loan.

How Do I Know What Is a Reasonable Offer?
When deciding how much to offer, you should weigh several factors: asking price vs. comparable home sales, market conditions, other potential offers, the home’s condition and whether you’re approved for a loan. A real estate agent can be very helpful in deciding how much you should offer.

What Is a Purchase Agreement?
A purchase agreement indicates the amount of your offer and may also include details that stipulate, for instance, which appliances stay and when you’d like to take possession of the house. The seller or selling agent will need you to sign a purchase agreement and put down “earnest money.” Earnest money is a deposit showing that you’re willing and able to buy the home; it’s usually a small percentage of the asking price and later applied as part of your down payment.

Title companies can also prepare a purchase agreement. If you choose not to work with a realtor, seek the advice of an attorney to help you prepare your documents.

Should I Have the Home Inspected?
Yes, you should. You have a right to inspect the home you’ve made an offer on, and most purchase agreements are contingent upon inspection. Hire a qualified professional to inspect the home -it’s the best way to ensure the property is in good condition.

Do I Need Homeowner’s Insurance?
Yes, you’ll need homeowner’s insurance before you close on your home. No reputable Florida home loan lender will give you a mortgage without it. Once your home is inspected and you’ve decided to go ahead with the purchase, the loan processing will go forward. It’s at this time you’ll need to show proof of homeowner’s insurance.

What Are Closing Costs?
Lenders are required by law to disclose in writing your estimated closing costs and fees. This is known as a “good faith estimate.” Additional costs might apply depending on your state, loan and down payment amount. For instance, title companies handle most closings, but there are some states that require an attorney to conduct the closing. In those states, borrowers are not required to pay a title company closing fee.

Before your closing, you’ll receive a document that outlines the closings costs you’ll be paying. It’s customary to take a final walk through of the property shortly before the closing to make sure the home is in the condition you expect it to be.

This seems like a lot, we know. But take it one question at a time and you’ll avoid the mistakes made by buyers seeking Florida home loans in the past.