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

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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.