Are you thinking about buying a house this year? At ACME, we know how to guide our buyers during the entire process, using these tips to help you get your financial ducks in a row as you prepare to look for that perfect place to call home!
- Have 2 Years Job History. Fact: Lenders check to see if you have continuous employment history for at least 2 years. It does not need to be the same job, they just don’t like big gaps of employment unless you have a legitimate reason such as maternity leave, etc. For self-employed individuals, a profit and loss statement for the current year would be needed.
- 580+ Credit Score. FAQ: Will getting a co-signer with a higher credit score help me get a better loan? The answer is no. A lender will always use the lesser credit score. Ex: Applicant 1 has scores of 725, 715, and 699. Applicant 2 has scores of 688, 652, 644. The 2 middle scores are 715 and 652, and the lowest is 652, so that is the score the lender will go with.
- Have 3 ACTIVE trade lines on your credit (car note or bank loans, credit cards) or 3 alternative trade lines (cellphone, cable, fitness, etc). Lenders look for this when securing a loan to see your ability to pay back credit and then use a debt-to-income ratio (DTI) to measure your ability to manage the payments you make each month and the money you have borrowed. To calculate DTI (Debt to Income), you add up all your monthly debt payments that report on your credit report (credit cards, auto loans, student loans) plus your estimated mortgage payment (including insurance and property taxes) and divide the total by your gross monthly income.For example, if you pay $300/month for your car, $100/month in credit card debt and $2,500/month for your mortgage, insurance & property taxes, your monthly debt payments are $2,900/month. If your gross monthly income is $6,000, then your debt to income ratio is 48% (2,900 is 48% of $6,000) Conventional loans can go up to 49.99%.
Generally, reducing and / or eliminating debt can improve your DTI which will allow you to qualify for a larger mortgage. However, reducing debt is a conscious effort. It helps to create a budget, and financially makes sense to determine how much you should be spending and on what. - Ask a lender if you qualify for First Time Home Buyer Programs. Hillhurst Mortgage Inc. has Home Ready, FHA and VA loans that are great for helping first time buyers close with low down payments, low closing costs and easy credit qualifying. As of now, the best low-down programs are the following:
-Fannie Mae Home Ready – 3% down – (SFR & Condo Only)
-FHA Loans – 3.5% down for 1 – 4 units at conforming loan limits.
-VA Loans – Zero down – for qualifying veterans.
- Save as low as 3%of the purchase price for a down payment.
- No Bankruptcy or Foreclosure within the past 4 years. This is a red flag for mortgage lenders and means you’re a higher risk as a borrower.
- Get Pre-Approved by a lender to know how much you can afford. Reach out to our lending team at Hillhurst Mortgage. You can call them at (323) 522-1020, email them at newclient@hillhurstmortgage.com, or apply online at www.hillhurstmortgage.com.
Here are three up-and-coming neighborhoods in NELA to look for a home:
- Highland Park, or “the next Silverlake.” Why? Because the market is incredibly strong. The Median Price is up 9%, the days on market keeps getting shorter, and bidding wars are still commonplace. There is a lot of room for HLP to grow in the future. Will you be a part of it?
- El Sereno, there’s a lot of demand in this hot neighborhood. Over the last three years, sales prices are up 30%, and 46% from four years ago. The really interesting part? There’s nothing to do in El Sereno yet! No restaurants, no places to grab a drink, only one little coffee place. But, as soon as that happens, you better hold onto something!
- Glassell Park, right next to Mount Washington. Cascading mountain views, and a little more affordable, solid neighborhood values. GP values continue to climb. Sales prices are up 24% over the last three years. Just a tip: if you bought a house in 2010, your home value has just about doubled. That’s solid real estate!
There are many eastern neighborhoods to experience a renaissance of hip coffee shops, cafes and restaurants moving into spaces on busy streets throughout Northeast LA. It’s time to put your name on something so you can enjoy these additions and increases, too.
Your NELA Real Estate Concierge,
Rachel Nierras
rachel@acme-re.com
323-282-9614
Sources: Doug Smaldino at Hillhurst Mortgage, https://la.curbed.com/la-market-reports
Los Angeles CA Real Estate & Homes for Sale