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Miami Real Estate Market Tips And Facts Part 2 October 17 2016
So where were we last week. Oh yes, qualifying for a mortgage with student loans.
In today's Miami Real Estate market, we are dealing with higher prices and lower inventory levels. What does that mean? More people looking for homes that aren't readily available.
So when shopping for a home, you have to know how much you qualify for and be extremely qualified so that when you place an offer, the sellers know you are serious.
So what does it take to be qualified for a mortgage? As I mentioned last week, student loans are a big part. Be sure not to be in deferment or forbearance. Setup a payment plan ASAP and have it report to your credit.
So what about income? It's not all that complicated, just be sure you have ALL of your income shown on your income tax returns. Do not take any unnecessary deductions, such as un-reimbursed employee expenses, meals and entertainment, mileage, cell phone, etc. Speak with your lender so they can let you know what deductions make a difference. The best route is to go with a standard deduction.
If you are self employed, I know taxes can be a burden, but the best way is to create an S-Corp, then have your S-Corp pay you so you don't have to pay self-employment tax.
I do have a create accountant if you need one.
Figure out the price of the home you are looking for and divide by 5. That would be the income you would most likely need. Of course, if you have debt such as student loans, credit cards, collections, auto loans... that amount would be divided by a lower number, but at least you have an idea...example a $260,000, you would need about $52,000 of income to qualify. That also all depends on the home's property taxes, association fees, and insurance.
These are just rough figures so you can get an idea of what you would need for income.
But TRUST ME - Before you bust your brain cells thinking...speak to a lender.. ITS FREE to get a pre-approval and get advice from your lender.
Here's a simple question. When you go on vacation, do you look at hotel rooms, themes parks, cruises, and then look at your accounts and bills to see if you have enough in your budget to take a vacation?? WELL, the same goes for shopping for a home, but it's even more important to do so, because the slightest miscalculation can cause you time, money, and frustration..you can lose your deposit if you just try to "wing it"
So I hope I was able to shed a little more light on what lenders look for. Next week or maybe this week, I will discuss more about your credit. FICO SCORE matters, but not as important as you think...
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