Feb 27, 2013
It truly is an exciting time to be a Wake County home buyer! After all, home prices are at historic lows and interest rates on mortgages are at near record lows as well!
However, we don’t advise you to enter the housing market uninformed. There are certain obstacles that you should be prepared to face as a home buyer.
Today, we’re going to tell you about the most common of these challenges.
Investing in Wake County, NC Real Estate
Here are some of the most common home buying obstacles you may encounter when navigating the Wake County real estate market – as well as how to address them.
Saving Enough Money for a Down Payment. Sometimes this catches buyers off guard – especially first-time home buyers. Generally when you get a mortgage, your lender will ask you to provide a down payment. Depending on what kind of loan you get – from FHA to conventional loans – you could be looking at putting down 3.5 percent to 10 percent of the sales price upfront.
Securing the Right FICO Score. Your lending institutions will most likely take the middle number of the three credit scores reported by the three major credit reporting agencies. Typically, a FHA loan will want to see a FICO score at or above 620 while a conventional loan will want to see a score at or above 720.
Meeting Lender Ratios. The majority of lenders will want the home buyer to have a maximum 33 percent front end ratio. This means that your mortgage payment as well as any associated taxes and insurance should not be more than 33 percent of your monthly gross income. In addition, lenders will also look at your back end ratio, which is your front end ratio plus all of your recurring monthly debt payments (such as car insurance or car payments). When all is said and done, lenders will want your back-end ratio to be less than 41 percent.
Getting a Home Appraisal that Matches Your Purchase Price. More than likely you’ll be taking out a loan to buy your property. If your home does not appraise at or above the purchase price, you could be looking at bringing money to the closing to make up the difference.
Meeting All Loan Requirements. The loan application process can be tedious for many home buyers because you will be expected to provide multiple bank statements and pay stubs to prove your income. You may be asked to provide additional paperwork as well. Make sure during this period that you don’t take out any new lines of credit or make any other major investments because the lending institution will more than likely check your credit one more time right before closing.
Home Buying on the Wake County Real Estate Market
We’ll answer any questions you may have about living in Wake County as well as offer you practical advice and helpful home buying resources like:
Until next time,