Real Estate &
Financing Tools

Seventy-Five Things I Do For A Buyer

   Doug Barry, Associate Broker

                     Licensed in Maryland
  Direct Line 410-207-4751  Office 410-583-5700  



Are You Qualified To Buy?

Some people that donít think they can buy, really can.Some people that think they donít have any problems, really do.And just about everybody is wrong about what they can really afford.Some real estate agents have the resources to give you a good idea of what you can do.Others may match you with a loan officer (either option is fine).If you are concerned that you may have a problem, itís not a bad idea to go to a loan officer first, but in most cases, a good real estate agent can direct you towards a loan officer that suits your particular needs.

You will need to provide your monthly income, monthly debts and the total amount of cash you will be using towards the purchase.If you get paid weekly or bi-weekly, you can determine your monthly income by multiplying your gross pay (before taxes) by 52 (weekly) or 26 (bi-weekly).Then divide that number by 12.If you just multiply your weekly check by 4, it will appear like you canít afford as much as you really can.

For your monthly debts, count personal loans, student loans, medical bills that you are making payments on, car payments and the minimum monthly payments on credit cards (including department stores, jewelry stores, etc.).If a debt will paid shortly after settlement, you may not have to count it.Alimony and child support counts as a debt if you are paying it, and income if you will be receiving it for a long enough period after settlement.

Debts do not include your current rent (because you wonít be paying that any more), utilities (thatís taken into account on the new home) or insurance.If you donít pay your insurance, it will be cancelled, but that will not affect your credit.Make sure you ask your loan officer to specifically clarify which debts you will have to count.

Different types of loans have different cash requirements.Often, a little more cash will substantially increase your purchasing power.If you need more cash in order to buy a more expensive home, consider selling stocks and bonds (your baseball card collection) or getting a gift from a close relative.If you get a gift, donít take the money until after youíve consulted with your loan officer.If you do it the wrong way, you may not be able to use it.Finally, in some circumstances, you may be able to get a contribution from the seller.If itís done right, a seller contribution can get you into a nicer house without costing the seller a penny (so theyíll agree to do it).
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©2002 Douglas R. Barry

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