Mortgages For First Time Owners

Dated: January 31 2019

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The first step to securing a mortgage that works for you is asking the right questions. Allow us to answer your most commonly asked questions about mortgages in Brevard County.

How much house can I afford?

This is perhaps the most common first question people have when they decide to buy a home. The general rule of thumb is that you can afford a home that is two to  three times that of your annual household income. That’s not always the case though, as other factors play a role in how much you can afford. Such as, how much money you have saved for a down payment, current savings to debt ratio, credit history, employment and so forth.

Do I want a fixed-rate loan or an adjustable-rate loan?

A fixed-rate loan is not going to change throughout the entire time it is paid off. An adjustable-rate loan (ARM) will fluctuate according to changes in interest rates. The right loan for you depends on a number of factors, including current mortgage rates. Talking to one of our experienced real estate agents will help you uncover the right answer. Curri Properties works closely with the top brokers in the industry, granting you the best deals possible on your mortgage.

How much cash do I need to buy a home?

A mortgage allows you to finance the majority of a home but you need cash for a down payment as well as other associated expenses. The three main costs you will incur that require cash include:

Closing costs: The money needed to pay for paperwork processing. In Florida the average closing costs for a $200,000 home total $1,806.

Down payment: The percentage of money required to purchase a home, qualify for a mortgage, and keep monthly payments manageable.

Earnest money: This is the deposit you must put down in order to make an offer on a home.

What is the average down payment?

If you are able to put down 20% of the purchasing price you are going to avoid additional insurance fees and enjoy a lower monthly mortgage payment. That being said, many people put down much less than 20%. For instance, FHA loans only require a 3.5% down payment. That means you’d put down $5,600 for a $160,000 home. It’s important to do the math and make sure that your monthly payments are not unaffordable as a result of putting down less money upfront. Don’t lose hope, there are mortgages that require $0 down for military personnel and there are similar deals for first-time buyers.

What is included in your mortgage payment?

When you pay your mortgage you are paying off more than just your home. In general, mortgage payments cover 3 separate components.

-Principle: repayment of the original borrowed amount.

-Interest: payment to the lender for borrowing money, dependent upon the interest rate at the time of purchasing. If you have an adjustable-rate mortgage this is the factor that will alter monthly payments.

-Taxes and insurance: Hazard insurance and property taxes may be included in your monthly mortgage. This is an optional component of some mortgages. Annual taxes vary on property size and value, and range anywhere from a couple thousand dollars a year to well over $10,000 a year. This is an important expense to inquire about before purchasing a home. If adding your insurance and taxes into your mortgage is optional for you, the money will go into a separate account to be paid directly to the County Tax Assessor and property insurance company. What other payments do I have to budget for besides my mortgage? Your home is going to cost you more money than your mortgage payment alone. You will still have to factor in the costs of things like trash, water, and electricity. We are more than happy to talk with the current listing agent or homeowner in order to find out the average cost of these fundamental expenses so that you can factor them into your monthly budget. You will also need to consider any homeowner’s association fees. The average homeowner’s association fee in Florida is $165.91 a month.

What do I need to apply for a mortgage?

-Social security number for you and anyone going in on the property with you.

-A copy of your checking and savings account that details the last 6 months.

-Evidence of any stocks, bonds or other assets you own.

-Most recent paycheck stub

-List of credit cards and other debt such as car loans, along with your monthly payment for each.

-2-years of income tax statements

Depending on the mortgage lender you go through there may be additional things you need to provide.

Can I obtain a mortgage if my credit isn’t that great?

It is undoubtedly going to be more difficult to secure a loan for a home if you have poor credit, although that doesn’t mean it’s impossible. There are federal mortgage programs and local home buying programs available to help people with less than stellar credit qualify for a mortgage loan. The better your credit the less you are going to pay in interest and insurance. If you have poor credit it helps to at least have a good down payment.

What is the first step to buying a home?

The very first step to buying a Brevard County home and getting approved for a mortgage is to check out our partner mortgage companies - click here. We want to help you achieve home-buyer success!

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