Buying a home can be an exciting and a nerve-racking experience. Here’s a roadmap to help you make the process successful and hopefully enjoyable. And, if you’re new to the world of real estate, this may help you avoid many of the mistakes that first-time homebuyers too often make.
No Blips on the Radar Screen
If you’re planning to seek a mortgage in order to buy a home, now is not the time to change jobs or purchase a car. Lenders look for steady employment, and they don’t want to see a lot of debt. Keep your finances and revenues on an even keel.
Ready-Aim-Fire NOT Ready-Fire-Aim
If you’re like most Buyers, you’ll need to get your finances in order before you start looking for properties and calling Realtors. That often begins with cleaning up old debts, improving credit scores, and building up savings in order to make a down payment. Looking for a home and then discovering that you’re not qualified to purchase is not just a waste of everyone’s time, but there’s a lot of emotional investment that goes down the drain. Don’t set yourself up for disappointment. Talk to a lender and get pre-qualified to purchase. Sellers will often ask to see a “pre-qual” letter from a lender when an offer is submitted. Barbara can suggest several lenders who will help. (barbara(at)seaglassproperties(dotted)com) Once you know what you can spend, the search begins, and hopefully the fun, too! If you’re a cash buyer, be prepared to demonstrate that the required funds exist when you make an offer.
Your Choice of VI Lenders
When it comes to finding a home loan, keep in mind that in almost all cases you will be working with an institution that has a presence in the US Virgin Islands, which probably eliminates your bank if you’re living in the mainland US. Our local banks are Banco Popular, First Bank, Merchants Bank and Scotia Bank. Barbara can refer you to a qualified mortgage associate at a local bank or a mortgage broker who works with various lending institutions that do business in the VI. These folks can answer questions and get you ready to begin your search for a home. Be sure to ask them about their “products” (mortgages) and the various costs they charge to help you finance your purchase. Shop your loan!
What Kind of Loan do You Need?
It depends in part on how long you intend to keep the property you want to purchase. Some buyers opt for an adjustable rate mortgage since they don’t intend to hold the property for a long time. Most buyers seek a fixed rate loan. Ask your lender about the differences. Then there are issues of lender fees, interest rates and points. What about an FHA loan, or a VA loan? Keep on reading! And know that Barbara will recommend loan officers and mortgage brokers who can help you figure out the right kind of loan for your needs. (barbara(at)seaglassproperties(dotted)com)
Many buyers take advantage of FHA (Federal Housing Administration) financing, which will require as little as a 3.5% down payment on a home. FHA loans are a good option for first-time homebuyers who may not have saved enough for a large down payment. Even borrowers who have suffered from bankruptcy or foreclosures may qualify for an FHA-backed mortgage.FHA loan applicants must have a minimum FICO® score of 580 to qualify for the low down payment of 3.5%. If your credit score is below 580, the down payment requirement is 10%. You can see why it’s important that your credit history is in good standing. As your lender if you qualify for an FHA loan, or for a complete understanding of how to secure an FHA loan, visit: https://www.fha.com/fha_loan_requirements
In addition to you qualifying for an FHA loan, the property needs to meet minimum standards set by the FHA. Structural integrity is important. Cosmetics are not. Check here for a more thorough understanding of how to select a FHA-qualified property: homeguides.sfgate.com/fha-inspector-look-for-1543.html
Service members, veterans and their spouses are eligible for Veterans Administration loans. Veterans who served during wartime must have been on active duty for at least 90 consecutive days. Conversely, those who served during peacetime must have served a minimum of 181 days. Veterans of the National Guard or Reserves must have served for at least six years unless otherwise eligible. Many eligible recipients can purchase housing with no down payment courtesy of a VA loan. For a complete understanding of VA loans, visit: http://www.veteranloancenter.com/va-loans/eligibility/
Luxury Home Buyers & Second Home Buyers
If you’re in the market for a vacation property or a “villa rental” to use as a business, and you need to finance the purchase, be prepared to put 20% down. If you’re looking for a property in the 7-figure range – be it a full-time residence or a vacation home – jumbo loans are available. Buyers in this price bracket might find it worthwhile to review local lending options with their stateside financial advisors. Depending on the cost of the property, you may be required to put as much as 50% down. If you need help in finding your luxury home, as well as finding a lender to help finance the purchase of your luxury home on St. Thomas, Barbara will gladly assist. (barbara(at)seaglassproperties(dotted)com)