NEW HOME PURCHASE

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STEPS TO BECOMING A HOMEOWNER
  1. Meet with us to help you organize your finances.
  2. Together we will determine what you qualify for and which loan programs best serve you and your family.
  3. Partner with a realtor who is willing to meet and discuss your desired property needs.
  4.  Visit available properties and submit offers for the ones you like.
  5.  Once an offer is accepted we open an escrow account.
  6. Together, with us and your agent, we work together to satisfy all lending and contractual obligations.
  7. Close your loan and begin moving into your dream property!

BASIC DOCUMENTATION

Since the market crash in the early 2000’s the mortgage process has begun to require an extensive amount of documentation to verify every aspect of a borrower’s finances. To make the mortgage experience more manageable you should begin to organize yourself  in advance and be ready to provide additional documentation of requested.  Shown below is the minimum documentation needed in order to qualify for a loan. 

  • A copy of drivers license and social security card
  • One full month of the most recent paystubs for all borrowers
  • Your two most recent bank statements showing all accounts and all pages
  • Most recent two years of tax returns: 1040’S, K-1’S and/or corporate returns
  • Most recent two years W2’S and 1099’S from all employers
  • A copy of all award letters from Social Security and/or retirement pension
  • A copy of the most recent balance in retirement Account(s): Stocks, PERS, 401K and Money markets

What will be included in my monthly payment?

Your monthly payments typically include PITI:

  • Principal – What you borrowed (also referred to as “amount financed”)
  • Interest – What the lender charges you to borrow the money used to purchase or refinance the home
  • Taxes – What you pay in property taxes to your local city/municipality and sometimes county; and
  • Insurance – What you pay to insure your home from damages (fire, natural disasters, etc.). There is also Private Mortgage Insurance (PMI) which is usually required on most loans when your down payment is less than 20%. PMI is paid monthly until you reach the 20% equity threshold.

What do I need to start?

Before diving deep into the search for a new home, you should get copies of all your finances in order. Following the short list above will help you to get the most general information ready. If you plan to have a co-borrower they will need to prepare the copies of their documentation as well. Once you have your documentation in order, visit us at Kingston Mortgage, we will give you an estimate of what you will be able to afford, and we can inform you on any other documentation you may need to be able to secure a loan.

What can I afford?

You’ll first need to determine what you would like your monthly budget range to be. You also need to keep in mind the additional costs associated with purchasing  a home, including: fees, down payment, taxes and closing costs. For help with factoring in all the costs associated with buying a house, and to best prepare yourself for the situation, Contact one of our experienced representatives here at Kingston Mortgage.

How much do I need to put down?

This depends on multiple factors including your credit score and what financing options you choose. Down payments can range from 3% on some 30 year FHA loans to 20% on most conventional 30 year loans. With choosing a smaller down payment though, you must consider that you may need to carry Mortgage Insurance on the property each month until you reach 20% equity in the home.

What about my credit?

Take a good look at your credit before before you enter into buying process. If you find that your credit score is below 620 you will have to do some major work to improve it, or be prepared to put down a much larger down payment. With every bit your credit improves, you will be required to put less of a down payment, and will also receive better interest rates. If there are small blemishes on your credit record, or inaccuracies, fixing them can help you to save money immediately and in the long run.