Buying A Home-Smart Basics to Know – What Comes First…Being Smart, Knowing the Basics, and Being Realistic
The most important investment you will ever make that is known to most individuals is the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.
Table of Contents
Table of Contents
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate.
You will not want to have past-due accounts on your credit, unpaid taxes, delinquent child support, medical debts, etc. If you do, you will need adequate explanations for any debt that is derogatory. *these kinds of accounts will normally lower your credit score and could cause a decline in your mortgage application.
It is always wise to have anything that is derogatory cleared up long ahead of applying for buying a home.
First Things First- Know What You Can Afford by…in Buying a Home-Smart Basics to Know
Get Pre-Qualified For A Loan
Being pre-qualified means that your credit and sometimes your income have been approved. The credit report is pulled and evaluated and if necessary additional documentation is requested.
Preliminary Approval
That does not mean you are totally pre-approved for the loan. When you get what is sometimes called a preliminary approval your credit may be satisfactory and IF you submitted your income documentation your debt to income may be approved. This all depends upon what the Loan Officer, processor, or initial underwriter has in their hands when issuing a pre-qualified notice.
A pre-approval means that you have been fully qualified with all documentation submitted and is acceptable (credit, income/employment/assets) with the exception of the property, and contract to purchase.
This does not mean there will NOT be additional documentation that could be needed for anything listed in the Real Estate Contract or property evaluation.
Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA/VA, USDA, and other loan programs may be available. Ask the lender about any special programs before you decide on a loan.
What Are You Looking For In A House
Before embarking on your journey of house hunting, you must know what you really want to find. It is wise to sit down with pen and paper and list all the features you care most about and give to your Real Estate Agent *see below, such as:
– Location (in a particular city, school district, or neighborhood)
– Size — how many bedrooms and bathrooms
– Parking — a 1-car garage or 2?
– Style — 2-story house or ranch-style home?
– Heating — central heating and/or air conditioning?
Equally Important- on a new sheet of paper list all the features you absolutely do not want in a house. For example:
– high-traffic area.
– high noise area (airport, train station, or highway in close proximity)
– maintenance — major repairs needed
The Process of Searching For a House in…Buying a Home-Smart Basics to Know…
As you start to consider different houses, keep both lists in mind. Your lists may change over time as you do more searching. You’ll want to add or remove features, or perhaps you’ll become willing to make compromises.
Realize that you most likely will not find the “perfect” home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a “for sale by owner,” “HUD property,” or a “foreclosure property?” You may need to let the Real Estate Agent show you what they have already looked into and searched for, from your list of priorities.
A number of websites list homes according to city, state, or price range. ( Zillow.com, Homes.com, etc.) Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Find A Good Real Estate Agent is one important benefit of Buying a Home Smart Basics to Know
It is wise for the first-time homebuyer to work closely with a real estate agent, no matter what type of property you’re looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator and will be able to help you with the complicated paperwork involved in placing an offer on a house or closing a deal.
It’s essential that you have a real estate agent working for you as the buyer, rather than relying on the seller’s agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
EndNote for Buying a Home Smart Basics To Know
These are just some of the buying a home smart basics. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
