Few Home Buying Obstacles Than May Be Encounter in Buying a Home

Sometimes home buyers encounter difficulties when purchasing a home.  Buyers need to be aware of potential obstacles and use a proper approach when encountered.  Knowledge, will provide buyers greater peace of mind.  In addition, they should have a real estate agent assisting them through the total transaction process.  Your agent, many times can provide you the professional guidance that is needed for the situation.   As a home buyer, you need to be aware of a few difficulties that you may encounter during home buying process:  First, determining your down payment; most buyers must acquire a mortgage.  You need to know what loans are available, such as, VA loans for veterans, FHA and conventional loans are available all potential buyers.  The FHA and conventional loans require a minimum down payment of 3.5% to 10%.  Second, as a buyer you will need to understand the importance of FICO scores.  In most cases you will need to have a score between 620 and 720 in order to get a loan.  This varies depending on the type of loan.  Third, there are two ratios that are important in order to get your loan:  first ratio is known as the front-end-ratio; this reflects the percentage of your total mortgage payment (includes, principle, interest, taxes and insurance) to your gross income.  Second ratio is known as the back-end-ratio; this includes your mortgage payment plus all revolving debt payments.  These ratios may vary by lender and type of loan.  Fourth, prior to receiving your loan, the property must appraise equal or greater than your loan.  If this does not occur, the buyer normally has the following options: protest the appraisal which may be difficult to do, buyer comes up with additional down payment, seller reduces the selling price for the home, or the buyer walks away from this transaction.  Fifth, buyer will need to satisfy underwriting requirements.  This may be difficult and frightening.  Underwriters may require additional documentation, review of appraisals, and require additional repairs, etc.  Remember, if you do not satisfy the underwriter, you probably will not get your loan.