Home buying tips - Here are some basic home-buying tips for every homebuyer no matter where you live or what your situation is. The first tip is to make sure you get pre-approved as a first step of the home buying process. Getting a pre-approval from a honest, professional and reliable mortgage advisor is crucial. This will let you know how much of a house you can qualify for, how your credit looks, and what kind of payment you will be looking at on a new home purchase. The pre-approval process is crucial. Your mortgage professional will let you know how much of a home you can qualify for on paper but only you know how much of a payment you can afford each month. Remember it is always better to "own your own home than to let your home own you".
Get approved for a loan prior to shopping for a home. Having your loan pre-approved increases your negotiating power.
Compare the materials the home is built from. A brick home will require less maintanence and generally be worth more then a wooden sided or vinyl sided home.
If you have access to a computer use it to your advantage. Go to different sites on the Internet and view the homes for sale before you waste time just driving around.
When you are shopping for a new home, be sure to not go out and make any major purchases. Once you are preapproved for a new home, the worst thing you could do is change you current sutuation. If you are also looking to purchase a new car, then wait until you have closed on the new home. Any major purchase, could increase your debt to income ratio (DTI), and unqualify you from purchasing your new home.
Make sure you research the type of house you want. Do you have any health problems that would hinder you ability to climb stairs everyday? Do you prefer the low upkeep of brick homes? Things like this will matter to your long term happiness with the home you choose. Always let your Realtor know the key things that are important to you so they can narrow the search down to only home that will fit your preferences.
When you find a house you like, take a look at it during different times to make sure you like the area. Check it out durring a week day, an evening, a weekend, etc. If you want to find out if there are other families or children in the area, go in the afternoon around the time the busses go through.
Try to pick a modest home in a good neighborhood rather than a large, lavish home in a less desirable neighborhood.
Remeber, the properties in closest proximity to your home will play the largest role in the appreciation (or depreciation)
of the property.
Be willing to work with For Sale By Owner properties. Often you can find a property that is below market value when you subtract the realtor fees. This assumes the seller doesn't pocket all the money saved!
When looking to buy a home not only make sure you don't make any new purchases or take on any new debt but do not be tempted to utilize any buy now and don't make a payment for 2 years or any buy now, pay later deals. These may seem very tempting especially if you see a great deal, which always seems to happen when you are buying a new home, but a lender will still require this to be added to your debt to income ratio. If you can not show proof of what the minimum payment is going to be on one of these deals, generally the lender will require 5% of the balance to be used for a payment to include into your debt ratio. This can ultimately affect your approval, your rate or both. So wait until you get the house and you have closed on your loan to go out and start buying.
Do not change jobs unnecesarily, unless for a higher position and higer salary. Lender banks do not like to see recent job changes, which usually translate to less job securities.
Be sure to research the area you intend to live. Knowing what amenities are available to you within a reasonable distance will save you frustration later. Knowing what is around you is very important; check crime statistics, sex offender database, school reports, and any other related report about a neighborhood you plan to move to.
The Home Buying Process - Buying a home can seem overwhelming at times, but with the proper knowledge of the process, the experience can be fun and exciting. In order to insure the best experience, you should become familiar with the entire process of buying a home.
Steps you will need to take:
- Consult a Loan Officer
- Submit an Application
- Discuss financing options
- Find out how much you can afford
- Consult a Real Estate Agent
- What do you need in a home?
- Find your home
- Submit Offer
In most cases, a real estate agent will want to be certain that you have been approved for financing before they take you to look at properties. Your mortgage professional will be happy to pre-qualify you and write a mortgage loan commitment detailing the conditions of your approval, which can then be given to your real estate agent.
During the home buying process you should sit down with your family and discuss what it is that you need from a home and what the most important functions and features are necessary to have. If you have a family of 6 that included a husband, wife, son, daughter, daughter, and daughter, then it would probably not be a wise decision to buy a home with 2 bedrooms. Also it would probably not be a very practical idea to buy a home that only had 1 bathroom with 4 girls in the home. Buying a 2 story home with no bedrooms on the main floor would not be a good decision if you had a family member that was not able to go up to the second floor due to physical limitations. This is why it is very important to decide what you absolutely need to have in a home and what you need from the home before you even begin looking at houses. Deciding the details about your new home up front will ensure a positive living environment and help to create a lifetime of wonderful memories.
Your loan officer is a critical part of your home buying team. The loan officer will help you identify the best programs for your financial needs and goals. Consulting a loan officer early in the process will give you the security of knowing how much you can afford by getting you pre-qualified to buy.
In order for your loan officer to accurately pre-qualify you, he/she will need to take an application which you will need to supply current employment, income, assets, debts, credit, and current housing information. Once the application is submitted, your loan officer will have the needed information to present you with loan options that will benefit you and help you meet your financial goals.
Once your loan officer discusses loan options and you have chosen a particular program and interest rate option, he/she will be able to pre-qualify you which will tell you how much you can afford to buy. This will help with the home searching process as you will not waste your time looking at homes in which you cannot afford to buy.
With the proper knowledge of your price range and payment options then you can contact a real estate agent to show you homes in that price range that you are looking for.
If you do not find what you are looking for in that range there are loans that may lower your payments so you can get into the home of your choice.
Some of the loan options would be an adjustable rate mortgage (ARM), interest only loan, 40 or 50 year mortgage or a pay option ARM.
Having your agent understand what you are looking for in a home will help with the overall experience of your home search. You should be confidant that your agent is aware of what you will accept out of your desired variables, and what you will not accept.
Key Roles in the Home Buying Process - During your home buying process you will talk to several different people. It is important to know what each persons role is in the process, and how they each can help you.
Your first step is to find a mortgage broker you are comfortable with and secure financing. Your mortgage broker will then issue you a pre approval letter.
The first person you should and will talk to when looking to buy a home with be a loan officer. A loan officer is responsible for issuing a pre-approval to you for the amount of a mortgage loan that you qualify for along with some terms of the loan and the basis of the approval. Your mortgage professional, Loan Officer, will work with you throughout the entire home-buying process and play an integral role during this process of buying a new home. You will work with your loan officer hand in hand to figure out what types of financing are available for you, what options you have and what will suit you best for your exact situation. Your loan officer will work with you from application all the way through closing. A good loan officer will keep in touch with you even after closing and will be able to assist you with all of your future financing needs as well.
You will also want to contact a Real Estate Agent. The agent will help you find a home that is in the area you want and has what you want in a house. The real estate agent will also help you negotiate the sales price and represent your interests throughout the process.
In some states, lawyers are customarily used in real estate transactions. Because your attorney draws up the purchase contract and represents you throughout the whole process, it is important that you and your attorney are on the same page. Any concerns you might have about the transaction or the property should be addressed during the initial meetings.