We moved down here to Southern California almost 2 years ago and are now in the position to know where we want settle and buy a home. We currently rent and enjoy the flexibility, but dread the day if a owner were to want to cancel a lease and also hate throwing away our money into someone else home and pocket.
So we have been working on it for the last 2 years to prepare ourselves. We have done well following the tips below, so now we are trying to make sure we know where we want to live. We like our current area in Temecula Valley, where homes are affordable, spacious and beautifully built. But the opportunity and lifestyle that the Beach Cities offer are something to be desired. With using the metric of 2.5 times our annual income, homes can become limited. But living out here we could move up to something much larger for not much more than we rent.
Getting into the southern California beach market is difficult. We have to save much more for a downpayment. It is better to have a 20 percent downpayment, because that monthly payment will be much lower as well as avoiding mortgage insurance which can be several hundreds of dollars extra per month depending on the price of a home. Capital One provides useful information on down-payments, refinancing from a FHA to Conventional loan, and mortgage insurance savings.
We are stuck on where we want to settle and invest into home ownership, but we have been working on making sure we will be in the position to qualify for a home loan when we apply. It would be nice to take take out less of a loan of course, but the price of real estate in Southern California is very spending.
While we like our humble abode, we feel its time to find a home that is bigger and when we look at the price to rent a much bigger home, its worth to get a home loan.
Buying a home is a complicated process. Capital One’s new online resource will help you understand the process with a glossary of terms to know, loans available and more.
Here is a useful list tips for first time home buyers and requirements needed for a home loan. Capital One provides very useful information to any home buyer. When applying for a new home mortgage or refinancing of an existing mortgage, you will need:
- Your FICO® Score and Credit Report will be pulled so making sure that all negative errors such as a long-ago-paid bills that appear as delinquent, bills that have been paid, disputes, etc.
- Having Tax Returns for several years is a requirement, including a spouse that files separately.
- Records of your Savings and Checking Statements will show your lender that you have the required down payment as well as funds to cover any repairs and costs that can come up with buying a new especially used home. Also include any Brokerage and/or Investment Records
- Pay Stubs from your employer are necessary to verify monthly income. Have your W-2s, and a solid work history will help. you may need two years’ worth. For those who are self-employed, a lender may want a profit and loss statement provided.2 years will be demanded for for means of income.
- If you have a Gift For A Down payment, such as using funding from a relative in the form of a gift, you will need a letter verifying that it is a gift and not a loan.
- For some first-time home buyers, a lender MAY ask for copies of the past 1 year’s rent checks, but not necessarily. This will help to prove reliability and show you have had the income to pay on time.
- One of the best tips is to Pay Down Debt starting now, and do not use credit. This will help to begin to increase your credit score, as well as lowering your debt-to-income ratios. Paying off debt to buy a new home is smart, so start as soon as possible and try to avoid costly purchases on credit.
Before you buy a home you will need to apply then pre-qualify for a home loan. Using the above tips for a mortgage will make the entire process mush easier. Have everything ready and work on the credit score. For more information on home buying, review CapitalOne’s Tips for First-Time Home buyers on the Home Loans Online Neighborhood.
Also make sure you understand the different kind of home loans available. These include Conventional Fixed Rate, Adjustable Rate Mortgages (ARM), FHA Loans, and other loans such as jumbo and conforming loans. Capital One provides resources and help on what these mean.
It will benefit you in many ways such as credit ratings, rates on loans, and of course that home loan or mortgage refinance. It is a lot of paperwork to pull together possibly, but now may be a good time to get yourself organized. Also remember that your mortgage should be no more than 28% of your gross monthly income. Using a mortgage calculator can help you figure this out. Living by the beach will be a big factor in costs, with many homes starting at half a million for a starter family home. But the opportunities to support the cost are there.
It is important to do our best to have the highest credit score and of course income. By also making sure we are well prepared, and shopping around for the best lender rates and closing fees, we can save a lot of money at purcahse time and in the longterm.
Having all these types of documents onhand will make applying a lot less stressful and put you on the path to home ownership.
If you’re interested in learning more about Capital One Home Loans and how we can help you get home, visit https://www.capitalone.com/home-loans/direct/learning-center or call us at 855-900-8886.
Have you recently purchase a new home or are in the process and have some useful tips or affordable areas to live?
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.