Owning a Home is Easier Than You Think: 3 Things a Mortgage Specialist Wants You to Know
When I met Majour Bey, I was intrigued by his use of Instagram for business. But that wasn’t the most interesting he told me. You see, he’s a mortgage loan specialist. I, like many of my millennial counterparts, see mortgage as a foreign land we won’t encounter for many, many years, no matter how successful we are professionally! It seems to be a land filled with things we simply can’t begin to comprehend without an advanced degree but, once I started talking to Majour, I realized it might not be that foreign for me.
When asked how much one needs to have in the bank to have a serious conversation with a realtor and loan officer, Majour had some comforting advice.
“The area/market place you are purchasing in is going to depend most on how much you need to purchase. To give a fair general answer, I would say anywhere between $5,000 - $10,000+ is enough to begin the process,” he said.
He also said your 401K might (finally) help you in the process.
“A 401k account or alike retirement account, is one of the best avenues to utilize for coming up with funds for down payment & closing costs. Homeownership is one of the few allowable reasons, to withdraw from your retirement funds early. The first step is to find out who is servicing your 401k (start by contacting your HR department) and verify how much is in the account. The second step is to call and verify exactly how much you would be able to withdraw for the purpose of a home purchase. The third and final step is to confirm whether or not the withdrawal will be a one-time deduction or a loan and come with a monthly payment. Once you know how much you have access to, you can add that the rest of the funds you plan to use for the transaction,” he said.
This was music to my ears! It meant that I could actually use all that money I saved for “someday” sooner than later.
Another thing he said? Your credit doesn’t HAVE to be perfect to purchase a home, either.
“620 is the ideal score to start at. If you’re not at 620, I still encourage clients to take the first step and have their credit evaluated by a lender who can go through it with them strategically construct a credit repair program that will optimize score increase, minimize money spent out of pocket and expedite being approved for a loan,” Majour said when asked what credit score you need to have to begin the process.
Another thing I found interesting? The costs associated with buying a home! I knew about closing costs and such, but I didn’t realize just how expensive it could be.
“The most expensive part about buying a home are the closing costs associated with it. The closing costs are separate from the down payment, and a lot of people come to me not differentiating the two,” he said. He went on to explain “the down payment is a client calling the bank and saying they want to purchase a home for $200,000 – but they only have $9,000 in the bank. The bank requires 3.5% down, which is $7,000 to purchase the home and we will give you a loan for the remaining $193,000 so you can purchase your $200,000 home.”
In addition to that loan, there are closing costs associated with securing the $193,000 loan and vary drastically depending on the state, county and purchase price of the home. Majour explained, “these costs include attorney fees, title company fees, inspection fees, lender fees, appraisal fees, escrow account set up and other certain costs can be associated depending on the property type, ie condominiums, which can have additional costs associated with the purchase.”
Realtors and Mortgage Loan Specialists, Majour said, work together to help you understand the full profile of what you’re working with and how to get the best deal possible.
The moral of this story? Talk to a loan specialist before you assume that owning a home isn’t in your (near) future. And if you’re looking for someone local? Go with Majour, not only was he willing to answer all of my questions, he had absolutely no judgement when it came to my score or my financial profile. And that, my dear friends, is the most important piece of the puzzle.
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