One of the things that make us stand out from other mortgage brokers is that we are local to Atlanta and we prioritize making ourselves available to meet with you face-to-face. We’re just as happy to complete the whole process online and via text. Whether you have found the perfect real estate agent and are on your way home or you are just starting to consider buying a home we’d love to sit with you and grab a cup of coffee. We understand that buying a house is complex and you probably have many questions. First of all, this is normal! It should go without saying, but it’s your first time, so don’t hesitate to ask and learn! We’re Atlanta’s number one mortgage broker and we got there by being a valuable resource for our clients.
We wanted to take a moment and give you some tips that we think will set you on the right direction! If you would like to grab a meeting with us to follow up we would absolutely love that!
Take a look at your personal finances!
Taking a moment and look at all your numbers before house hunting will help you set healthy expectations. Buying a wonderful house but being so financially stretched that you can’t afford a lawnmower is no fun! We suggest that you write down what you make monthly and how much you spend on recurring payments. Take a look at your credit score, is there anything you need to dispute? What shape is it in? You may have the funds for a downpayment, but if your credit score is low it may be wise to take a few months and build it up. There are some great tips on raising your credit score here.
This brings us to a frequently asked question:
Do I need a great credit score?
The short answer is no, however it makes the process significantly more and tt’s relatively impossible to get approval for a mortgage without a good credit score and the better your credit the better your interest rate. Typical conventional loans require a score of at least 660, whereas an FHA loan can be approved as low as 580. If you find yourself under 680 we would recommend taking a season and rebuilding your credit score.
The question that usually follows is,
Does my spouse’s credit score matter?
The answer is pretty straightforward: yes if your spouse is submitted as a co-applicant. If you are both signing for the loan, lenders will take the two middle scores from both you.
If you need help looking over and understanding your personal finances reach out to our recommended financial advisors. Once you have clarity you will be able to figure out how much home you can afford.
Figure Out How Much House You Need and Can Afford!
How much house do you need? The average first-time homebuyer stays in their first home for five years, so what do the next five years look like for you? Answering what you need before what you can afford will help save you money that you can put towards other things.
So how much house can you afford?
This comes down to your debt to income ratio or DTI. Simply put your DTI is how much you spend recurring payments such as credit card payments, car loans, and child support etc. versus your total income. We suggest you stay at 43% of your DTI. So for instance, if you make $9,000 per month and you have a car payment that is $400, and your credit card payments total $600 we would suggest spending no more than $2,875 a month for your mortgage. (9,000 x 0.43 – 1000 = 2,875).
Understanding your DTI and how much house you can afford will help your real estate agent show you houses that you know you can buy.
Gather Digital And Physical Copies of Needed Documents!
Our final tip is pretty simple, gather what you will need to submit for a loan.
After you fill out an application we suggest gathering the following so that you have them ready when they are needed.
- Two months Pay stubs
- Two years of W-2s
- Two years of tax returns (If Self-Employed)
- Bank statements from the last two months
- Investment statements
- Proof of where you got money for a down payment, such as bank statements or a statement from someone saying it was a gift
- Proof of identity
- Social Security number
There are hundreds of other questions you may have for us. Call, email, or text us with the absolute wildest questions and we will get you an answer or point you to a resource that can answer your questions.
Ready to get an official pre-approval?