Thinking of buying a home soon? If you answered yes, than you may benefit from these tips I’ll be talking about here. Considering how big of a purchase buying a home can be, there are some things that you need to be prepared for when deciding on purchasing a home.
Check Your Finances-
You should sit down and try to figure out how much money your going to be able to afford each month for a mortgage. Figure up how much your bringing in, and how much your spending & what’s left over after all your expenses are paid. You’ll have to start saving for a down payment, you may have to have 5% to 20% for a down payment, depending on the loan.
Get Your Credit Score-
Knowing your credit score will determine how much, and what kind of a home loan you’ll qualify for. Most lenders require a score of 620 or above to consider you for a home loan. Make sure there is nothing in your credit report that will effect your score negatively. You can get your credit report for free at annualcreditreport.com.
Shop Around For A Loan-
There are different loan options out there, you just have to see which one works best for you financially. You can get a VA loan if your in the service, veteran or are a widow of someone who was. There is FHA & Conventional loans as well. You can even check with your own bank or credit union, and see what they have to offer. Take your time and do some research.
Now that you’ve decided on a loan, you should get a preapproval letter stating how much you qualify for, so that way you’ll only be looking at homes you can realistically afford. Having a preapproval letter will also help you when talking to a realtor, and what they should help you look for.
Find A Realtor-
Now that you’ve been pre-approved a realtor will be more willing to work with you. A realtor doesn’t want to waste time showing homes to someone who doesn’t even know if they can buy one, or what their budget will be. You can find a good realtor by getting recommendations from friends and family, and even doing some research in your area online.
Searching For A Home-
With your pre-approval letter and a realtor, you can now find the right home in your price range that will fit in with your budget. Buying a home within your budget will help keep expenses down, because you know what you can, and cant afford. You can do some searching online as well, just keep in mind that pictures online only show part of the home, wait to see it in person then decide if you really like it.
Making A Offer-
Now that you’ve found the home you want, and is on budget, you need to make an offer. Try not to make an offer to low or you may insult the sellers. Consider the home prices in the area and ask your realtor about comparable sales, current market value. Your realtor should be able to help you in this area.
Getting An Appraisal-
Assuming you made and offer and the seller has accepted, the next step is the appraisal. During this step the lender usually selects and hires the appraiser. The appraiser will check out the home and evaluate it to see how much he/she thinks the house is worth. If it’s at least the amount you agreed to pay for it, then the loan should proceed forward.
Getting A Home Inspection-
Some buyers get the home inspected a few days after the offer is accepted, it doesn’t always happen that way though. The inspection can be done before or after the appraisal. Getting a home inspection by a professional is a very good idea. Most of the inspection will be looking at the roof, plumbing, electrical, heating & cooling etc. Very important step, it will give you the option of backing out if there is a serious problem with the house. They then give you a report with details on any problems, and you can decide if it’s enough to walk away from. You can decide is it worth trying to get it fixed by the seller, or taking it on yourself.
During closing is when you have a lot of paperwork, and they distribute the funds. The seller gets their money, the realtor gets paid and the lender fees are paid. Your lender gives you a written estimate of the closing costs when you apply for the loan, make sure you have saved up enough to cover closing costs. You will probably pay more than the estimated amount, just make sure your properly prepared. Once the check is delivered to the seller, you are ready to move into your new home. Congratulations! Now all you have to do is pack and move.
I hope you found this information useful. Leave me a comment below and let me know what you think. Happy house hunting.
Here is a free home buying checklist for you to use. Free Home Buying checklist
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