First Time Home Buyer Tips in St. Louis, MO
By: Jeremy Durham
Buying your first home can be quite daunting. Any first time experience can make one nervous. Couple that with the need to share your personal financial information, take on a significant monthly expense that you may have never budgeted for previously, and making decisions on factors that you have never heard of before, this can be overwhelming for many. I hope in this article, I can share an overview of the vital components of your potential mortgage loan and offer some piece of mind. Let’s get right to it!
-Your Appraisal
This is a vital document included in your home purchase, but what is it? An appraisal inspection is performed by a certified and licensed real-estate appraiser. The appraiser will most likely spend several hours researching the home. They will inspect for public information and recent comparable homes in the immediate area, as well as, personally visiting the home for a visual inspection, take photos, check for safety or damaged items in the home, etc. They will then compile their multi-page report and determine a fair market value for your home. This monetary value determination ensures that the home is actually worth what you have agreed to pay for it, and protects the lender offering you a loan that the collateral (the house) is worth what they are lending.
-Your Credit
Your personal credit history is a huge part of being able to qualify for a home loan. Many of us already believe that we have a great credit score, so we must be able to buy any home we wish. On the other hand, some of us think, perhaps we may have credit issues that may not allow us to purchase a home. Well, it is more complicated than that. You may have some credit blemishes, but there are a variety of loan program options that might be able to accommodate you, even with certain blemishes. On the flip side, a great credit score doesn’t automatically mean you will be able to qualify for any home you wish.
-Funds for Down Payment and Closing Costs
This topic is the cause for many last minute issues in a real-estate transaction that leaves a buyer asking "Why?" There are numerous, complicated rules for what funds can or cannot be allowed to be used for closing. Here are some Hot Buttons:
Cash – Cash cannot be considered as legitimate funds for closing as it cannot be traced to a source. Even though cash is a viable currency nearly everywhere else in the United States, unless you are paying cash for the whole home, cash can cause real issues. If you plan on incorporating cash on hand into your next home purchase, speak with us as early as possible.
-Gift Funds
Loan Programs do allow a buyer to receive a gift for funds toward closing, but this comes with its own set of rules. The person offering funds must be a guideline accepted relationship to the buyer(s). If you wish to use gift funds toward your home purchase, please alert us as soon as possible in the purchase, so we can ensure that the proper guidelines are followed and no delays ensue.
These are some of the items that pose the most confusion for many first time buyers. For more information, please contact me at jdurham@firstintegrity.com or (314) 856-5626. My name is Jeremy Durham, NMLS# 989777. I look forward to speaking with you soon!