dreamstime_xxl_3195952You’ve worked hard, saved your money, and managed your credit responsibly. Now you’re saving up to buy your biggest purchase ever – a new home. Whether it’s your first home, your dream home, a vacation home or an investment property our philosophy at The Jake Taylor Team is the same: a better educated customer is a better customer. Period.

That’s why I want to educate you about the entire home buying process – not just mortgage financing. My approach is designed to help you determine how much home you can afford, understand low down payment options, guide you through writing a strong home purchase offer, and pre-approve you for a mortgage so you can negotiate your purchase with confidence. I’m here to make buying a home as simple as possible.

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How much house can I afford?

“How much house can I afford?” That’s a great question. Helping you understand your limitations and capabilities ensures that you get as much home as possible without getting in over your head. That’s what partnership is all about.

The Jake Taylor Team can help you estimate your purchase power by utilizing one of our convenient mortgage payment calculators. This is a fast and easy way to get an initial indication of affordability. But an accurate evaluation can only be determined by understanding your unique needs and characteristics. Affordability is important to every potential home owner, but it’s especially critical for our first time home buyers. That’s why The Jake Taylor Team offers many low down payment programs.

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dreamstime_xxl_37251179So you can afford the house, great news!

What’s next?

Writing a strong purchase offer

One of the most common mistakes that home buyers make is failing to understand how important communication and partnership between the lender and realtor is, and how to leverage that to create a strong purchase offer. A strong purchase offer can differentiate you from your competitor, possibly offering less money but still winning the deal. How can The Jake Taylor Team help you accomplish that?

It’s easy when you understand the purchase contract and there are four contingencies that are commonly found in purchase contracts. These contingencies typically protect you (the buyer) during the purchase process. While I’ll always ensure your protection, some of the contingencies can be removed, resulting in a cleaner, more powerful offer for the home owner.

The two contingencies I will ensure go into the offer are a home inspection contingency- so you know the quality of the structure, and an appraisal contingency – to make sure the appraisal matches the final sale price. Both of these protect you. On the other hand, a financing contingency allows you time to get your finances together. If you still own your old home, and need to sell it before buying your new home, typically I would write in a sale of home contingency.

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What if I don’t have a big down payment?

One of the great mortgage myths is that you must have a large down payment to qualify for a mortgage loan. For many of us, especially first time homebuyers, a 20% down payment on their home mortgage is not very realistic. While other lenders offer low down payment options, they often require extra insurance to protect the mortgage lender in case you default on your mortgage loan. This insurance is called private mortgage insurance (PMI).

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Getting Pre-Approved for your mortgagedreamstime_xxl_2403829

Nothing is more important than obtaining a pre-approval when buying a home. First, it helps you narrow down the homes that you have under consideration because it tells you what price house you can afford. Second, pre-approval can give you a leg up over other buyers when you find a home you like. Sellers are more likely to accept offers from buyers who they know have financing secured, because the sale is more likely to close.

A legitimate pre-approval letter gives the seller confidence in you (the buyer). I analyzes your credit and verify your income and liquid assets (bank accounts, investment accounts, retirement, etc.). Pre-approval is a good step to take before you start shopping because it shows sellers that you are, in fact, a serious buyer. In some housing markets, for your offer to be reviewed it is necessary to be pre-approved. That way, sellers can be certain the deal won’t fall through.

Remember that you can buy a home for less than your pre-approval amount. Think of pre-approval as your limit. If your budget doesn’t allow for a $1,500 monthly mortgage payment but your lender says you can afford that much, stick with your budget. I want you to get the most for your money, but avoid getting in over your head!

If you are ready for a pre-approval, the first step is to call. I will discuss all of your options and help you negotiate the strongest purchase offer. Remember, certainty can be a substitute for price in the mind of the seller. In other words, a full pre-approval letter can often convince the seller to accept a lower price because they know you’re a solid buyer. It also means no surprises for you, since the only thing standing between you and final loan approval is the appraisal of the home. Writing a strong offer can also help you negotiate at a lower price.

Still have questions?

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