Most of us are aware that in order to purchase a home, we must obtain financing and view a lot of properties in order to locate the ideal one. However, there’s a lot more to it than that, and many people aren’t aware of everything that’s involved. As a result, individuals enter the process unprepared and frequently encounter major (and often unpleasant) surprises. Make sure you’re not one of them. Instead, have a look at our guide on what you’ll need to buy a house in Fountain Valley.

Finances and Credit in Order

To buy a house in Fountain Valley, you’ll need to first have your finances and credit in order. Essentially, this is ensuring that you are financially prepared to purchase.

You should start looking for a home long before you actually start looking for one. Examine “your existing financial condition and [see] how it aligns with what mortgage lenders look for in a borrower, determining what you can afford, and saving for a down payment and closing costs,” according to the article.

You’ll also need to make sure you meet the minimum criteria to be able to secure a mortgage:

• A minimum credit score of 620 for a conventional loan or 580 for an FHA loan
• Good credit and payment history
• Proof of income and steady employment
• A debt-to-income ratio below 50%

Mortgage Pre-Approval

After you’ve double-checked your finances and credit, it’s time to consider being pre-approved for a mortgage so you can buy a home in Santa Ana. Pre-approval will tell you how much you can borrow and how likely you are to acquire financing (assuming nothing changes), as well as demonstrating to sellers that you are a serious buyer.

Here’s what is typically involved in getting pre-approved . . .

“A lender will check your credit report to see if you have a good credit score and if you have any large debts or blemishes on your record, such as bankruptcy. The lender will also consider how much debt you have in relation to your income, as well as your income and assets. To make the procedure go as smoothly as possible, have documentation such as current W-2s, paystubs, bank statements, and any other pertinent information ready to go.”

Cash for Down Payment and Closing Costs

And in order to buy a house in Compton, you’ll also need to have saved up enough cash to cover the down payment and closing costs.

The usual amount for a down payment used to be 20% of the buying price, and you still need to put 20% down to avoid having to pay for private mortgage insurance (PMI). However, there are various downpayment choices available today that allow you to spend less than 20%.

For example, “FHA loans require only 3.5% down, and there are conventional-loan options that allow you to go as low as 3% down – with the caveat that mortgage insurance will be included. If you qualify for a VA or USDA loan, you could get a home with 0% down.”

In addition, there are closing charges to consider. “Don’t forget to take in closing costs when calculating how much you need to save.” Your specific closing expenses may vary based on your position, but they typically range from 2% to 5% of the home’s value.”

All the Necessary Documents

To buy a house in Lakewood, you’ll need to have all the necessary documents ready to hand for your lender and at closing.

The main documents you’ll need to provide your lender (along with authorizing them to access your credit history) include:

• Pay stubs, tax returns, and W-2s (typically for the past two years)
• An employment verification letter
• Bank statements
• Information about all your other assets such as stocks and bonds
• A photo ID
• Your rental history (if applicable)
• A Year-to-Date Profit and Loss Statement (for the self-employed)

In some cases, you may be required to produce extra paperwork. “If a family member is gifting your down payment and closing charges,” for example, “you must provide a gift letter.” This section contains information about the donor as well as the value of their gift. You’ll also produce copies of the court order if you’re utilising alimony or child support payments to qualify.”

A Good Fountain Valley Agent

The last – and arguably most critical – thing you’ll need to buy a house in is a skilled local real estate agent. An professional agent can walk you through the entire procedure, ensuring that you have everything you need and assisting you in avoiding any issues. Sell my house fast in Irvine, CA, finding a good agent can be a time-consuming process that requires extensive research and interviews. However, you can make things lot easier by calling a reputable agency with experienced agents. Contact us immediately at (714) 701-8210 if you’re ready to buy a home in Fountain Valley.