It's Not That Complicated

$2,400 down!?! That was the response of a young lady among the crowd, to the question “how much did you have to pay for your apartment’s security deposit?”. Anthony then asked, what was probably the most powerful question all afternoon; “did you know that you could purchase a house for the same amount down as you would pay for a security deposit?” I watched the faces in the room light up at the thought.



Anthony Lee, a licensed realtor of Long and Foster Reality, hosted his second First Time Home Buyers Seminar yesterday (Sunday, July 27,2014) in Yeadon, Pa at Social Space on the 700 block of Church Lane. With his charm and whit, Anthony was able to engage the audience, creating a free and friendly environment where all questions could be answered. Although he specializes in First Time Home Buying, he is no novice to the world of real estate investing either. He was able to use that to capture the attention of those, who like me, already own one or more properties but were looking to expand, from a business perspective.



Tired of throwing money away in rent? Ready to buy your first home or even investment property? Anthony confirmed that “it’s not that complicated” by providing five simple steps to get you on your way:

1. Credit Check
2. Pre-approval
3. House Hunt
4. Inspection/Appraisal
5. Closing

Know Your Credit

A 620 credit score is the minimum required to qualify for a mortgage, however according to Credit Consultant, Josh Butcher, from BETTER QUALIFIED Business and Consumer Experts, ideally you want a score of 650 or higher. A higher credit score will result in more favorable terms for your loan, specifically a lower interest rate. Just this 30 point difference can potentially save you tens of thousands of dollars over the life of the loan. If your credit score is not quite meeting the mark, don’t fret. That’s what Josh is here for! During Josh’s segment he explained Better Qualified’s service as well as gave some general tips on how to repair credit, prior to purchasing a home.

Here are a few of the tips that Josh gave us:

• Avoid 30 day late payments- one 30 day late payment can drop your credit score a whopping 50-100 points literally over night!
• Cap you credit balance at 30%- try to keep your balance at 30% or less of your credit limit. So if you have a $1,000 limit on a credit card you’ll want to keep your balance at or below $300. This will show that you are not excessive in your credit usage or at risk of being overextended.
• Use a secured credit card to help establish/repair credit- Secure Credit Cards generally require an upfront cash deposit of roughly $200. Josh suggested that you make one small purchase a month and pay if off in full each month.

Better Qualified’s Service:

Better Qualified has been in business for 9 years, 4 of which Josh has been consulting. Here are the high level points of what you need to know about what Josh and Better Qualified has to offer.

• Line by line consultation-
• Timeframe- it takes anywhere between 3 and 6 months to repair credit
• Process- A credit consultant, like Josh, will review all the negatives on your credit report and along with the assistance of one of their two lawyers, will take the appropriate course of action to dispute any in question.
• Expected results- Better qualified will improve your credit score anywhere between 50 and 150 points within that 3 to 6 month time span contingent upon the number of negative in your history.
• Price- The price will range from $300-$1,200, depending on the number of negatives in your credit history.
If you are interested in signing up for credit consulting or just have questions about credit, Josh is your guy! (see resources section for contact info)

Pre-Approval

Dennis McNichol, Mortgage Development Officer, from Santander Bank, talked about the most important part of the process, FINANCING. A bank will base your preapproval on five things: Credit Score, Gross Income, Assets, Liabilities, and the House itself. The part that requires the most preparation on the potential buyer’s part is providing proof of their gross income. Santander Bank, like most others, will ask for the most recent of each of the following: 1) 2 years of W2s, 2) 2 federal tax returns, 3) 1 month of paystubs, 4) 2 months of bank statements, and 5) documentation showing any supplemental income.

Once that part is out of the way, you will need to determine which loan will be best for you. There are several different types of loans. The most popular are Conventional Loans, FHLB Grants, and FHA Grants. Dennis choose to focus on the FHA grant because it generally requires the least amount down. FHA loans ask for a 3.5% down payment and allow for up to 6% seller’s assist. Each buyer is responsible for the down payment as well as closing costs (application fee, credit check, appraisal, title insurance, private mortgage insurance, transfer tax, etc.). These expenses on a $100,000 house will run you approximately $10, 000. However with a knowledgeable realtor and a good mortgage officer, these costs can be reduced to $2,000 or less. Yup, you read that right, just $2,000 to move in to your own home!

House Hunt, Inspection /Appraisal, & Closing

This is where Anthony would step in and carrying you through to the end of the process, and also where the fun begins! “You will know as soon as you’ve found the house for you,” Anthony says. Just bring an open mind when you start your search.

As for the inspection and appraisal, although, Anthony does neither himself, he assured us that he can get all of his clients in touch with 2-3 qualified professionals to handles both jobs.

You want your closing to go as smooth as possible. There are a few key players that are necessary to achieve a smooth transition. A good realtor however is crucial. A good realtor will be there to help you negotiate for the best terms (including that 6% seller assist) for the perfect home for you.

Overall I believe the seminar was a Success. Anthony presented with confidence and conviction, really proving to his audience that he knows his stuff! The prospective home buyers tested him with some difficult questions, but he passed each and every time with flying colors! If you are ready to embark upon the journey of purchasing your first home there are many happy clients who will attest to the hard work and great representation that Anthony provides throughout the process. There were actually two testimonies that concluded the seminar; both of which came from satisfied home owners, who truly appreciated the dedication and professionalism of Anthony’s service.

And there you have it! Buying a house from beginning to end, in a nutshell. That was easy right?! Well maybe no easy but certainly Not That Complicated! If you have any additional questions visit aleerealestate.com or check out the professionals in the resources section below. Hope you learned a few new things. I know I did!



Resources