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Welcome to the BeSmartee blog. Enjoy a wide selection of articles related to mortgages, the industry, and real estate.

Is Your 2017 Goal to Become a Homeowner? Here is What You Should Do To Make it Happen

By Amanda Curry · Feb 15, 2017 · Mortgage

Is Your 2017 Goal to Become a Homeowner? Here is What You Should Do To Make it Happen

Image courtesy of Flickr, Number 10

Don't know the first thing about becoming a homeowner? Fear not! Read on for proven steps to make your dream a reality in 2017!

Purchasing a home, maybe with a white picket fence, is definitely the American dream. With the New Year here, you might be ready to take the leap and buy a new home. However, you're not quite sure where to start.

Although homeownership is incredibly rewarding, buying a new home can be a bit overwhelming if you've never went through the process. There are many different ways you can make the process go as smoothly as possible. It's all in how you prepare!

The First Step to Buying a Home: Setting a Budget

The first step to purchasing a home is to make sure homeownership is right for you and your family. In this case, you'll need to look over your finance and set a budget. You'll need to have a good idea of how much you can comfortably afford.

How much of a mortgage you can afford is determined by each lender's debt to income ratio. DTI is simply your monthly debt commitments divided by your monthly gross income. Once you have this number, you can easily determine your maximum home price with an online mortgage affordability calculator.

You'll also need to remember that a monthly mortgage payment won't be your only new expense. Your new home will add other costs to your budget like taxes, utilities, insurance, HOA fees, and maintenance costs. These extras can certainly add up, so be sure to include them into your monthly budget when setting an overall housing budget.

Considering the Down Payment

Lenders require that you put money down when you purchase a new home. This is referred to as the down payment. Down payments can vary based upon the type of mortgage. Typically, homeowners opt for a down payment that ranges from 3.5% to 20%. Saving for a down payment is one of the most important steps of homeownership.

If you opt to put down less than 20%, your lender will require you to pay mortgage insurance. Mortgage insurance protects lenders against nonpayment or default. This insurance, also known as PMI, would be included in your monthly payment. Once you invest at least 20% equity in your home, your PMI will drop off.

If you've saved less than 20% for a down payment, you may qualify for other mortgage options , including FHA loans and VA home loans.

We recommend setting up a separate savings account if you haven't already done so in order to save for your down payment. This way, you'll be less tempted to spend it if it's away from your other funds. You can even set up a predetermined amount to be automatically transferred into your savings account each month. Out of sight - out of mind!

Mind your Credit Score

Your credit score shows your overall credit history and helps lenders decide if you qualify for a loan. The higher your credit score, the more mortgage options you are likely to be offered. Plus, it's more likely that you'll qualify for a lower interest rate.

When you apply for a loan, a lender will typically look at your credit score from three major credit agencies: Equifax, Experience and TransUnion. If the scores differ slightly from each other, the decision will be based on the middle score. Credit scores generally range from 300 (lowest) to 850 (highest). A 700 or above is considered a "good score", while anything under 620 could make it difficult to qualify for a conventional mortgage.

If you have less than stellar credit, you'll want to think about ways to improve your credit score before you get approved for a home loan. To improve your score, you may try paying down credit card balances, make an effort to pay your bills on time, and you'll want to avoid applying for new credit cards. The length of your credit history also plays an important role in your credit score. The longer your established history, the higher your score.

Research Different Mortgage Options - Find One that's Right for You

There are many different types of mortgages available on the market. Without doing some research, it'll be difficult to know which one is right for you. Not all loans are created equal. Some are better if you plan on staying in the same home for many years, while others are better if you plan on relocation in the future.

Some of the most typical mortgage loan options include a fixed rate loan, adjustable rate, interest only loan, FHA loan, VA loan, and reverse mortgage loan. We recommend this article for researching and finding the best mortgage for you.

Get Pre-Approved

If you've saved enough money for a down payment, researched different mortgage options, have a good credit score, and completed all of the steps above, you may be ready to take the next step and get pre-approved. This can be incredibly helpful, especially in a competitive home-purchase market, as sellers prefer offers from pre-approved buyers.

Be Smartee has completely transformed the online mortgage marketplace, making it incredibly easy for homebuyers to get instantly approved. If you are ready to take the next step, you can compare hundreds of loans at once and get instantly approved in just minutes on BeSmartee.com.


Real Estate Commission: Explained, Revealed and Compared
By Arvin Sahakian · Aug 17, 2015 · Real Estate Data

Real estate agents receive commissions from home buyers and sellers, collectively earning over $50 Billion per year. Learn how commission amounts are set, who pays them, and how they work in this article. Read more.

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California Property Tax: Complete List by County 2014-2015
By Tim Nguyen · Nov 26, 2014 · Real Estate Data

List of secured property tax rates for all counties of California fiscal year for 2014-2015. Read more.

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California Proposition 60 and 90: Your Complete Guide
By Tim Nguyen · Nov 28, 2014 · Real Estate Data

If you live in California and are over the age of 55 you can effectively reduce your property taxes when buying a new home. Read more.

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What to Expect During the Home Loan Closing Process
By Arvin Sahakian · Feb 24, 2015 · Mortgage

You've heard the term used before, but what does loan closing mean? Find out all you need to know about the process. Read more.

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The Surge in Foreign Real Estate Investment in the United States
By Laura Agadoni · Feb 24, 2016 · Real Estate

Foreign real estate investment in the United States, both commercial and residential, is a huge phenomenon that is only expected to accelerate, maybe even to skyrocket, in 2016. Read more.

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Houston vs. Dallas: Which One is Better to Live in?
By Amanda Curry · Oct 11, 2016 · Real Estate

Houston Vs. Dallas? If you are considering moving to either of these major metropolitan areas, we've created a resource to help you make the decision process a little easier. Read more.

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5 Illegal Borrowing Activities: Things That Are Illegal When You Try to Get a Home Loan
By Laura Agadoni · Jan 22, 2016 · Mortgage

Whenever there is money to be made or money to be spent, some unscrupulous folks will take advantage, trying to game the system or commit all-out fraud. Read more.

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Does Homeowners Insurance Pay Off your Mortgage if the House is Burned Down?
By Amanda Curry · Feb 8, 2017 · Mortgage

In this article, we explore how homeowners insurance works and what happens in the event of a house fire. Read more.

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16 Ways to Improve Your Debt-to-Income (DTI) Ratio
By Veronica Nguyen · Nov 29, 2014 · Mortgage

Your DTI is used by mortgage lenders to determine whether you qualify for a loan, and if so, for how much. Improve your DTI with these 16 tips. Read more.

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5 Tips on Getting a Mortgage Loan after Bankruptcy
By Veronica Nguyen · Apr 15, 2015 · Mortgage

A bankruptcy will make it very difficult to attain a home loan. These 5 tips will help you re-establish your credit quickly in order to qualify for a home loan. Read more.

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