The Home Buying Process  

 Whether you have decided to purchase a home in the Jacksonville metro area or you are still in the decision making process, it is imperative to research as much as possible about the home buying process. Below are a few things to consider. 

  There are many factors to consider when contemplating homeownership.While there are benefits and drawbacks to owning a home, you have to decide what is best for you. Homeowners experience the freedom of having a place of their own and the benefit of an investment where the equity potentially increases each year. Historically, homes have appreciated in value, making them worth more than when they were purchased. Additionally, there are significant tax benefits to owning a home and
paying mortgage interest. Homeownership also means you are responsible for all maintenance and repairs. In addition to paying the mortgage every month, there are other expenses to keep in mind: homeowner’s insurance, property taxes, condominium fees and utilities. In the event you wish to move, selling a home is more difficult and more time consuming than giving notice to a landlord.

How Much Can You Afford?
Once you have decided to become a homeowner, you should review your finances and determine how much you can afford per month. Begin by analyzing your current monthly expenses. It may be necessary to cut back on some areas of spending in order to afford a mortgage payment and the other costs of owning a home. After paying your current monthly expenses (rent,   groceries, etc.), do you have any money left over?

• How much are you willing to spend on housing each month?
• How much money can you use as a downpayment?
 

  Most of the HMFA mortgage loan programs require that monthly housing expenses do not exceed 28% of your gross monthly income. The amount of housing expenses plus any other monthly payments on installment debt (e.g. credit cards, car loans) should not exceed 36% of your gross monthly income. Check your credit report when applying for a mortgage, a lender will look at how much you can afford to pay and your credit history to determine if you qualify for a loan. Consumers should check their credit report for discrepancies before going to a lender. You can call or e-mail one of the three major credit reporting bureaus for a copy of your credit report.

Equifax 1-800-685-1111   www.equifax.com
Experian 1-888-397-3742  www.experian.com
Trans Union 1-800-888-4213  www.transunion.com

Mortgage Pre-Approval
  A mortgage pre-approval is not the same as pre-qualification. A pre-approval means you have completed the application process and have a written commitment from the lender to give you a mortgage loan for a certain amount. Pre-approval gives you an advantage when dealing with a seller since you already have financing in place. Typically, the home remains under contract while the buyer obtains financing. The seller will be able to complete the transaction sooner to a pre-approved buyer.
The disadvantages of pre-approval are that you must pay the application fee and complete the necessary forms verifying your employment, income and credit. If you later decide not to use the lender who issued the pre-approval, you will lose the application fee and have to go through the process again.

What Kind of Home is Right for You?
Everyone’s dream home contains different things. While your next door neighbor may want a backyard pool in his dream home, you may want a large yard for children to play in. Since there are many different ideas of what makes a dream home, you need to decide what features you absolutely must have in your new home. Homes come in many styles and sizes. There are single-family dwellings, duplexes, town homes, apartment-like condominiums and cooperative units. Within each home there are many differences, such as the number of bedrooms and bathrooms. Create a list of things you must have for your new home. Then make a wish list of those amenities you would like to have, but can live without.

Find a Real Estate Agent
A buyer’s agent is responsible to you and is obligated to follow your instructions. Real estate agents receive a portion of the sale price as their commission. The commission is typically paid by the seller. Begin by asking family and friends for a recommendation. Interview several real estate agents before selecting one you feel comfortable with. Make sure the agent you select is licensed in this state and familiar with some of the areas you are considering.

Making an Offer
A purchase offer is a written proposal stating what you are willing to pay for the home, when the closing date will be and any other terms that will be included in the contract the buyer and seller need to agree upon. The offer will also include an expiration date, at which time the offer becomes invalid if the seller has not responded. If a seller would like to change any portion of your offer, you may receive a written counter-offer detailing their changes to your offer. You are free to accept the counter-offer or make one of your own. The proposal does not become a binding contract until both parties
agree to the terms and provide their signatures.