Residential Mortgages

Owning a home is part of the American Dream. To make it a reality however, you need careful planning and a clear goal in mind.

Step 1: Planning

What kind of house should I buy? Is this neighborhood good for me and my children? Is buying a house better than paying rent for the rest of my life? Can I afford a house?

These are some of the questions that potential buyers ask themselves when they debate the purchase of a new home. A free consultation in our office can answer all of your questions, but this web site can give you some answers as well.

Now, Foxx Capital Funding, Inc. cannot decide for you on what kind of house or what neighborhood you should live in. You have to make that decision yourself. We of course can give you some advice on how to make this crucial decision.

How can I afford this?

Here is a question we can answer. When properly financed, a home is not all as expensive as people think. It helps to know how much money you have at the moment and what it is doing for you. For instance, many Americans are in high debt. By taking out a loan you will only put yourself into further debt. Also, this debt can lower your credit score, making it harder to get a loan.

Therefore, before making any crucial financial decisions, it is good to take stock of your financial situation.

Your current monthly income is a good way to test to see if you will be able to afford a new home. Take your monthly expenses and subtract that number from your monthly income. Whatever is left over is money that you can afford to spend. Most people who have money left over from month to month never realize how much they actually have until they see the figures in writing.

Now, take this number and compare it to your monthly mortgage payments. If your left over money is not enough to pay your monthly mortgage, don't get discouraged. You may still be able to afford that mortgage. This is why we have many different mortgage programs.

It is also a good idea to make sure you have some money in the bank. Some lenders require that you have enough money in a bank account for a few months worth of mortgage payments. This is only for the lender to feel safer about lending you their money.

Step 2: Financing

Our first exercise was too see if we could make payments every month. Next we must see if the initial purchase of the property won't break the bank. Depending on what kind of loan you can apply for, you may be required to pay a certain percentage of the purchase price in the form of a down payment. Most likely it will be 20% but there are programs that allow you to pay as little as 5%. Of course, this depends on what program you qualify for.

This is also a good time to check your bank account again. You may have to take out some of your savings to put a down payment. The larger your down payment, the less you will have to borrow from the lender.

Also, and this is not really required, but you can spend extra money to "buy down" an interest rate. This is when a bank charges you a "point", which is one percent of the loan, to get a lower rate. While may save you money in the long run, it is recommended that you consult with a financial planner (like us) to check the numbers before you make this decision. Your accountant is also a good person to check with.

Just because you have enough to buy your house in cash, doesn't mean it is a good idea to do so. Remember, there are taxes to be paid as well.

Step 3: Consulting a Professional

When you do decide to buy your dream house through third party financing (through a broker like us) or directly through a bank, it is important to have some things prepared to make everyone's life easier.

Documentation

These are some of the things you may need to show to get financing:

• A sales contract signed by you and the seller
• Your most recent tax documentation
• A recent credit report (we will process you one for free if necessary)
• Bank statements

Not all of these documents may be needed but it makes everything easier if you have them prepared for when you need to get financing.

Now, if you have any other questions or require more details on this program or any others, please contact us or prequalify through our Web Application