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Written by Greg Davenport Northwest Florida Daily News!!
However, Chavers and Jim Archer, AmSouth Bank mortgage banking manager, said the first step, especially for first-time home buyers, is to sit down and consult a professional.
"The first step is to talk to a lender," Archer explains. "People think just because they're a first-time home buyer no matter their credit or job situation they can get a loan. That's not true. The definition of a first-time home buyer is a person who has not had ownership of property in the last three years.
Chavers said even with a flawed credit score most people can still purchase a home.
"For any first-time home buyers the first thing to do is get pre-qualified before they even go to a realtor," Chavers said. "The reason for that is a realtor shows you a $200,000-$300,000 house and you go back and find out you only qualify for a $150,000 then it's a letdown. Don't get discouraged. Different lenders have different qualifications. If a person has a credit situation we try to work with them. "
The first thing the duo said FTHBs need to do is get their financial records together. Bring W2 forms for the last two years, paycheck stubs (from both jobs for couples), divorce papers and bankruptcy information.
Archer said lenders look at a potential home buyer's past credit, income and debts in order to assess that person's ability to pay back a loan.
While he added that lenders do take into consideration a potential home buyer who currently pays more in rent that what he or she qualifies for in loan funds he cautions about the possible ramification of "biting off more than you can chew."
"Lenders do take into consideration if you're currently paying more than you qualify for, but the scary thing is do you want to pay that much every month, " said Archer. "Unfortunately, lenders are going to try to qualify you for the house you want, but you have to sonsider are you goingto be able to buy a car or have money to do the things you want to do if you buy this house? We call this 'house poor.'
If you're starting out you don't want to buy a $250,000 home to where you strap yourself in debt and you can't enjoy life. You
might have to buy a fixer-upper, but you get started. Then you sell it when you move up and you have a little equity in it."
Another thing the duo said FTHBs should do is shop around for a lender he or she feels comfortable with and get educated on the financial assistance and loan programs available. There are a number of financial assistance programs strictly for FTHBs that do everything from paying the down payment to offering better structured loans. However, everything isn't for everybody, Archer warns.
"Another misconception is just because you're a first time home buyer you need to go with a first time home buyer program, " Archer stated. "I might be a first time home buyer, but I am 40 years old and have 20 percent to put down, so why would I go with a first time home buyer program?"
Also, Archer added that while the housing market in the Fort Walton Beach area is starting to slow down it's definitely still a seller's market. This affects FTHBs because even though they may qualify for a decent home loan, it may not be enough for the area they wish to live. Currently, Archer sees certain parts of Fort Walton Beach and Crestview offering FTHBs the most house for the dollar.
While Chavers said FTHBs should not be discouraged or intimidated by the loan process, they should take it seriously because it will make things a lot easier. "This is a process," Chavers stated. "This is not something that is automatic. It's not guaranteed, but don't give up. There are companies that will help."
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Pat Williams Senior Vice President Certified Residential Specialist ERA American Realty of Northwest Florida, Inc. 1270 N. Eglin Parkway Shalimar, Florida 32579 Cell Phone 850-585-4062 pat@era-american.com |