Today’s real estate market is highly competitive and preparation is key or you might miss out on “the one.” Follow these tips to buy a home for a smooth process.
Make a concerted effort to get your financial house in order.
Assessing your situation early on pays dividends. When applying for a home loan, lenders review your current debt, payment history, assets and income in order to determine your credit worthiness. If you have less than a perfect past, don’t stress. Time heals all wounds, even those on your credit report. Keep current on payments and credit scores will increase as time elapses. Have credit card debt? Focus on paying down balances. These two factors are the biggest components of your score. Paying attention to these details opens up your options and decreases credit costs.
Start saving money if you don’t have funds set aside to buy a home.
An FHA loan, which is government backed, requires 3.5 percent of the purchase price as a down payment. In addition, there are closing costs and expenses that can add up quickly. This includes bank, title company and government fees. You should also perform a home inspection which will run between $300-500. There are programs available that provide assistance to qualified buyers, but having your own money for some of the costs will be necessary.
Find a real estate professional.
A good Realtor, one that’s a member of the National Association of Realtors, will help you in all aspects of the home buying process. From providing references to closing, experienced Realtors have been around the block (literally), so lean on them to answer your questions and put their knowledge to work for you.
Shop around for the best lender FOR YOU.
Your Realtor should be able to provide names of individuals and companies who have done a good job for clients. In addition, ask friends and family members for recommendations. There are countless options and not all are created equal. Interest rates, loan costs and time to close are just some of the things to consider when comparing choices. Don’t assume the bank who holds your checking account is the best alternative. Do your homework and you might save money, time and headaches later.
Sellers want to know you can close the deal and a letter from the bank that says you qualify is essential. Your selected lender will review the information and documents you provide. If you meet their lending criteria, your loan officer will provide a letter that is your key to start the search.
Estimate your monthly costs and identify your budget.
Your lender will provide an initial estimate of your total payment, which will incorporate your principal, interest, taxes and insurance, commonly referred to as PITI. From here, you can determine how much you are comfortable spending, and that may be less than your approval amount.
Hone in on where you want to live and create your wish list.
Whether you are spending $100,000 or a $1,000,000, there will be compromises. Decide what items are a must and which ones fit into the category, “it would be nice.” Communicate openly with your real estate agent so he or she can understands what you really want.
Now, it’s time to search, offer and close!
Regardless of your situation, buying a home is possible with hard work and determination. Here is to your best year yet and to getting into the house you always wanted.
Call us today at (614)437-2100 to learn more about how 43 Homes can help.