Prequalifying Helps Determine How Much House You Can Afford
by
Brent Jeansonne and Cindy Oneto-Jeansonne
Broker Associates
According to TEAM PLATINUM of NAPLES, Brent Jeansonne MS, GRI®, ABR®, rCertified, eCertified, REALTOR® and Cindy Oneto-Jeansonne GRI®, rCertified, REALTOR®, before you start your house hunting in earnest, the real estate professional with whom you are working likely will “prequalify” you to determine a price range you can afford.
Brent Jeansonne states “prequalification is a necessary part of the home buying process that helps save you time and money and don’t be shy or reluctant in withhold information about your income or credit status. Your real estate professional isn’t trying to pry. Rather, he or she must know all details related to your ability to obtain a mortgage”.
By candidly discussing your financial situation, you’ll give the agent the information necessary to show you homes you can afford, Cindy states “If you don’t open up, you are placing the real estate professional in the role of a tour guide, not someone who can help you find a home within your budget. You’ll wind up wasting your time and that of the seller.”
Once you have signed a contract to purchase a home, you must choose a lending institution or mortgage company from which to obtain your home loan. Your loan application will request financial data including your place of employment, assets, and liabilities (including recurring debts such as credit card bills and car payments).
Here are two important tips on loan qualification
- Do not borrow the down payment without disclosing the loan, submit fake letters of credit, or make secret financial arrangements.
- Accurately list your income and assets, all debts and the approximate amounts you owe.
You’ll most likely be charged a credit report fee by the lender, which will cover the cost of having your credit history examined. Credit reporting agencies compile credit reports on consumers, including bill payment history, as well as whether you have been sued or filed for bankruptcy among other information.
Federal credit reporting laws do not give you the right to inspect the actual credit report at the reporting agency or to receive an exact duplicate of the report. But you are entitled to a summary containing the sources of the report’s information.
If your ability to obtain a mortgage is adversely affected by the credit report, you have the right to challenge its accuracy and seek corrections.
Brent states, “The credit report is part of the information the lender uses to determine if you qualify for a loan. It is not a mechanism to prevent you from buying. Remember, lenders want to make loans, not turn them down.
Brent is a member of the Real Estate Buyer’s Agent Council (REBAC) of the NATIONAL ASSOCIATION OF REALTORS®, who has obtained the Accredited Buyer Representative (ABR®) designation. As the world’s largest association of real estate professionals focusing specifically on representing the real estate buyer, REBAC is “The Voice for Buyer Representation,” with more than 32,000 active real estate professional members of the organization throughout the world.
BERKSHIRE HATHAWAY FLORIDA REALTY
TEAM PLATINUM of NAPLES
Cindy Oneto-Jeansonne GRI®, rCertified, REALTOR®
Brent Jeansonne MS, GRI®, ABR®, rCertified, eCertified, REALTOR®
(239) 784-9229 • (504) 458-1205
www.TeamPlatinumofNaples.com
www.platinum-1.com
If you’re buying or selling a home this year, you’re likely saving up for a variety of expenses. For buyers, that might include things like your down payment and closing costs. And for sellers, you’re probably working on a bit of spring cleaning and maintenance to spruce up your house before you list it.
Either way, any money you get back from your taxes can help you achieve your goals. Using a tax refund is a common tactic for buyers and sellers. SmartAsset estimates the average American will receive a $2,897 tax refund this year. The map above provides a more detailed estimate by state.
If you’re getting a refund this year, here are a few tips to help with your home purchase or sale this season.
How Buyers Can Use Their Tax Refund
According to American Financing, there are multiple ways your refund check can help you as a homebuyer. A few include:
- Growing your down payment fund – If you haven’t started saving for your down payment, let your tax refund kick off the process. And if you have a fund already, the money you get back could put you closer to your goal.
- Paying for your home inspection – Your home inspection can save you a lot of headaches down the road by helping you determine the condition of the house. As a buyer, you’ll typically be responsible for paying for your inspection, and it’s definitely worth the investment.
- Saving for closing costs – Closing costs are additional expenses you’ll need to pay once it’s time to close. They average anywhere between 2-5% of the purchase price of your home.
This list is a great start, but it isn’t exhaustive of all the costs you may encounter as you set out on your homebuying journey. The best way to prepare is to work with a trusted real estate professional to make sure you understand what’s to come in the process.
How Sellers Can Use Their Tax Refund
If you own a home and are planning to sell this spring, your tax refund can help you make sure your home is ready to list. Here are a few ways current homeowners can put their tax refund to good use:
- Making small upgrades – NerdWallet provides a list of great ways to use your tax refund, including tackling small projects or boosting your curb appeal to help your home stand out.
- Making repairs – If there’s anything in your house that needs to be fixed, American Financing notes that completing repairs is another great use of that money.
- Buying your next home – Whether you’re selling to move up or downsize, you can use your tax refund to help pay for any costs on the purchase of your next home.
Of course, it’s important to talk with your trusted real estate advisor before taking on any projects. They’ll make sure you can focus on areas that’ll help you receive the best possible price when you sell.
Bottom Line
Funding your home purchase or sale can feel like a daunting task, but it doesn’t have to be. Your tax refund can help you reach your goals. Connect with a local real estate advisor today to discuss how you can start on your journey.
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