First Time home buyers in Pasco County still have some options to purchase a home with little or zero down payment. After all, down payments continue to be the main obstacle preventing first time buyers from purchasing. Before choosing the right mortgage program, buyers should know a few basic things listed below:
Determine your real budget: It seems like a no-brainer, but you’d be surprised how many first time buyers don’t start by figuring out how much money they have to spend on their house purchase. It’s easy to call a realtor and fall in love with a house, but why waste time looking at homes that are out of your price range? The last thing you want is to find your dream home and realize it’s way over your budget.
Most banks and lenders will tell you that you can spend up to 29 percent of your gross monthly income on your mortgage, taxes and homeowners’ insurance premium, and up to 42 percent on your total debt ( housing expense, plus car loan, etc) Some loan programs may even allow higher ratios, but remember just because a mortgage company is willing to lend you more money doesn’t mean you should borrow it.
To calculate a housing budget you can live with, start by figuring out how much you spend each month. Track your daily expenses over the course of four weeks to get a real sense of how much is going out and where you’re spending most of your available cash – Gas, grocery store, etc. Watch your savings and calculate how long it will take you to come up with money needed to close on a home.
Before you commit to a mortgage amount, be sure to take the true cost of making those monthly principal, interest, taxes and insurance payments each month and apply them to your NET take home pay. Don’t worry about mortgage deductions or the after-tax consequences – just look at the numbers and think about what else you spend each month and try to understand if you’ll feel comfortable. Because if you can’t sleep at night worrying about paying the mortgage or fixing a broken AC unit, you’re over budget.
Devise a real world “wish list”: The key here is to be realistic. Based on the housing budget you figured out, and where you want to live, compile a list of what you’d like to have in your first home. Research is helpful when putting together your list. Check out some homes in your price range online to get a feel for what your money will buy, and make your wish list based on the home you see. If you’d love a pool, but none of the houses in your price range have one, be prepared to compromise. Remember you really shouldn’t spend more than you can afford just for extras like this.
Get pre-approved for a mortgage: In the Florida market, many deals contingent on financing fall apart because buyers can’t find a mortgage company to give them a loan. Getting pre-approved for your mortgage in advance will help eliminate this problem. Start by talking to a loan officer about different financing options. FHA 3.5% down payment? USDA 100% Financing? USDA Rural Housing is a popular option for first time buyers as most of central/east Pasco county is approved and considered rural. Most of Wesley Chapel, Land O Lakes, Zephyrhills is eligible for 100 percent USDA financing. Maybe you want to live on the west side of Pasco County – New Pot Richey, Bayonet Point? If this is case, a FHA mortgage would probably be the best option as this area is not approved for USDA financing.
Once you’ve compared a few loans types it’s time to get pre-approved. Some lenders may charge for a loan pre-approval (most won’t) so be sure to ask about those costs up front. You’ll need to provide the lender with details of your credit, income and assets to start the process. The mortgage company will verify everything and issue a letter that tells you, and sellers, how much the bank is willing to lend you. The process is typically done in about 30 minutes and most pre-approval letters are good for 90 days. If you don’t find a home within that period of time, you may need to re-qualify with your lender. Important tip – be sure work locally. If you are purchasing a home in Florida, deal with a Florida lender…not someone in California. Also, remember that some loan programs, like the USDA Rural Development loan, is a specialized program. Not all loan officers deal with or understand this program, in fact most don’t. Just insure you ask about this and make sure your bank/lender understands the complexities involved. Florida home buyers can visit www.UsdaMortgageSource.com to be connected with a trained USDA loan specialist today.
Find a good Realtor. A knowledgeable Realtor is just as important as a great loan officer. Finding a good realtor can lift the weight of searching for the right home, contract negotiations, ordering appraisal and home inspection, plus many other things. Like your loan officer, make sure your realtor is familiar with the type of loan you are doing. If you need a Realtor recommendation in Florida, reach out to us and we would be happy to help make the connection.
Know the hidden costs of home ownership: Many first-time home buyers get so caught up in the idea of owning a home that they forget about life after closing. The real costs begin after you move into the house. In addition to mortgage payments, you’ll have to pay electrical, cable, phone, landscaping, and be responsible for any maintenance issues that come up while you own the home. These costs are all the more reason not to spend every last dime on your mortgage payment. If you have nothing left after paying your mortgage, you’ll be unable to pay all the other fees or save for unexpected expenses.
There’s a lot to think about when buying your first home, but remembering these tips should help you navigate the process and avoid potential issues. Take your time, do your research and don’t let anyone pressure you into buying a home you’re not completely sure of.
Florida home buyers that have questions are encouraged to reach out to us. Please submit the short Info Request Form on this page for quick service. You can also call us 7 days a week at ph: 800-743-7556. USDA Mortgage Source serves all of Florida – including Hillsborough County – Riverview, Tampa, and Pasco County – Wesley Chapel, Odessa, Land O Lakes, Zephyrhills FL. 2018
Pasco County First Time Home Owner –