BUYING YOUR TAMPA BAY FLORIDA HOME
Deciding Where to Live - Tampa, St Petersburg, Clearwater
Buying a house is a big step – and deciding where to live Tampa, St Petersburg, Clearwater or surrounding areas is one of the biggest decisions you will ever make. Now is the time to prepare yourself for your home purchase with the necessary information that will enable you to make the right home purchase decision.
Searching for a new home is invariably both an emotional and a financial decision. It’s best to take some time to review your finances. Be sure to consider the expenses involved in owning a home when outlining a budget. Can you afford to buy a home in the Tampa, St Petersburg, Clearwater metro areas?
TAMPA, ST. PETERSBURG CLEARWATER COSTS OF HOMEOWNERSHIP
Covering any Sudden House-related Expenses
Budgeting is important when considering home-ownership! You, as the owner, will need to be able to cover any sudden house-related expenses that come up in addition to your regular monthly expenses. When creating your new monthly budget, remember to add the following new costs:
- Property taxes and special assessments
- Home/hazard insurance
- Property maintenance
- Association and membership fees (if applicable, for condominiums, town-homes and some developments)
Some of the above listed fees will be included as part of your monthly house mortgage payment, while others are not. Be sure to ask about how these fees are to be paid.
CREDIT AND CREDIT HISTORIES
Your credit history will affect your ability to obtain a mortgage for your home purchase. Lenders want to see a record of how you borrowed, and when and how you repaid, money in the past. These money management habits are reflected in your FICO score. FICO scores range from 300 to 850 and lenders believe that borrowers with higher scores are more likely to repay their loan.
Home-buyers should obtain a copy of their credit report by contacting: www.annualcreditreport.com
DOWN PAYMENTS
You will need to make an investment in your new home, called a down payment, in order to obtain a house mortgage. A down payment is the amount of money you spend upfront on a home purchase and is collected at the time of closing. This amount will determine the type and amount of mortgage you could qualify for and repay. When the bank combines the required down payment amount and the amount you are borrowing (the mortgage), it should equal the total sales price of the home you plan to purchase.
MORTGAGE INSURANCE
If you’re making a down payment that is less than 20% of the home price, your lender may require mortgage insurance. Mortgage insurance is an insurance policy protecting the mortgage lender if the borrower fails to make their mortgage payments resulting in default. This type of insurance does not protect the borrower. However, this may assist you in becoming a homeowner as opposed to saving the full 20% down payment.
QUESTIONS ABOUT WHAT YOU CAN AFFORD?
Generally, when a financial institution reviews a mortgage application, two basic guidelines are used to determine how large a mortgage to grant:
1) Principal, Interest, Taxes and Insurance (PITI) should not exceed 25-28% of gross income and
2) PITI plus other long-term debt should not exceed 33-36% of gross income