Purchasing a home is
possibly one the most important investment decisions of your life. Planning is
important. Saving for the down payment and reviewing your credit are essential
but there are other things you need to know before you buy a house:
A. PRE-APPROVAL: Take control. Get a pre-approval
letter and Select the Mortgage
1) CHECK YOUR CREDIT;
It is essential that you have a good credit unless you intend to pay cash for
the home. And by good we mean a credit
score over 700. A mortgage company will use the middle of your three scores. Limiting the number of credit pulls to one a
year will help increase your score. However, checking your own credit doesn’t
affect your score. Pulling your credit report to check for inaccuracies is
always a good idea. Your lender should be able to assist you with getting it
corrected if you begin before the home buying process.
2) CHECK YOUR
FINANCIAL STABILITY; Have you saved
enough for the down payment, escrows and any closing cost not covered by the
seller? A home loan is typically for 30
years, make sure that you will be able to manage the mortgage payment long term.
Having a financial reserve of two months payment in liquid assets after the
closing is essential. Although nothing is set in stone, job security is of
paramount importance.
3) PICK THE RIGHT
LENDER; Most buyers don’t realize that the trust and relationship with a
knowledgeable lender is paramount to the purchase. The lender will help you to
get prequalified. Advise you and the
Realtor, when making the offer, how much seller credit you will need to cover closing
cost. After your contract is accepted,
the lender will continue working to ensure your loan is approved and you have
the funds to go to the closing table. In today’s marketplace where 50% of all
loan applications are denied, going to a big bank where the loan officer has
less control may not be your best option.
B. SEARCH FOR A HOME: Work with
your real estate agent to search for a home
.
4) PICK THE RIGHT
REALTOR; Does the Realtor understand your taste and preferences. Are they
experts in the areas you want to purchase. Is the Realtor available to show you
properties when you aren’t working, on weekends or in the evening? In addition, an
experienced agent can provide you with valuable information such as: Pricing trends, Neighborhood conditions, Community services, Schools, Property tax rates As a buyer, you don’t pay for a real estate
sales professional’s services. Instead, the seller of the house typically pays
your agent a commission for bringing a buyer to their home. If you’re not
already working with a real estate agent, be sure to ask your lender for
recommendations. We work with many real estate professionals and can find
someone to suit your needs.
C MAKE AN OFFER: Choose the home
that’s right for you and make an offer!
5) MAKING THE OFFER; A knowledgeable Realtor and the trust you have in
them is of paramount importance. In this market we are turning from a buyer’s
market to a seller’s market. There may be
multiple offers on the property and even second rounds of offers. Your Realtor will be able to advise you about
increasing the offer or when to walk away so you don’t over pay.
6) CHECK THE HOME: Most loans need an appraisal but if you are buying
a home that doesn’t require it, get an appraisal anyway. A third party unbiased
appraisal should protect you from over paying.
Get a home inspection, although most home inspections tend to go
overboard and make mountains out of molehills. It doesn’t hurt to know all the
minor flaws and it can assist in getting a seller to credit you for the repairs.
