Stop Wasting Money On Rent And Own A Home Instead
Stop Wasting Money On Rent And
Own A Home Instead
Buying a home can seem like a frightening prospect especially if it is your first home. So much is at stake — your savings, your credit rating, your financial freedom. It’s difficult to get up the courage to sign on the dotted line, even if you want that home very, very badly. This article may help you to set up a good game plan, and survive with your smile intact.
Establish Your Needs And Wants
Begin your search for a perfect home by making a careful assessment of the kind of a home you need and want. I recommend that you take the time to do this in writing. Take time, right now, to be as specific as you can about your particular requirements.
Determine How Much You Can Afford
Set up a budget for yourself. Decide how much you can really afford to invest monthly for your house payment. Be realistic here. Most Lenders want your payment to be no more than 28% of your total monthly income.
Get Prequalified Or Preapproved By A Lender
You can save yourself a lot of time and heartache by meeting with a Lender before you start your search for a home.
A good lender can let you know what specific loan programs would be best for you. They can also help you understand what it takes to qualify for the loan. By taking a look at your financial situation and looking at your credit history, a lender can usually give you a good idea if you can qualify for the loan.. Many Lenders call this “Prequalifying a Buyer.”
If you would like to be certain that you can be approved for a loan, you may want to ask to be preapproved. In the approval process, all of your documentation is completed and submitted to an underwriter. The preapproval you get back is an actual loan commitment from a Lender. This means that you definitely qualify for a loan. Talk to your Lender about the costs and time involved, as they are different for each Lender.
Find A Good Real Estate Agent To Help You
You can learn a lot about an agent by just letting the “agent talk” to you about how they help buyers. Within a few minutes, you will probably be able to determine if their style is compatible with yours. Do you have time to work with us? Can you represent us as a “Buyer’s Agent”.
Find A Home That Meets Your Needs
Keep an organized record of all your research data. Write down comments about the homes that you see. Keep track of your likes and dislikes. Narrow down to a neighborhood or several neighborhoods that you like. Neighborhoods are such a personal choice–like a home. Drive them on weekends and after work hours if you are not already familiar with them. Get a feel for the neighborhood. Your agent can tell you price ranges in your neighborhoods of choice.
Once you have chosen your neighborhood(s), you can narrow down a lot on the internet. Ask your agent for help. There are good computer programs available. Tell your agent about any homes you see that interest you and that you’d like to know more about. This includes homes you’ve “discovered” as you’ve explored the area yourself, or those advertised in the newspaper. or magazine. If you like to spend time driving around by yourself looking at homes, ask your agent for a list of drive-bys — homes to consider first from the outside. Your agent can make appointments later to show you the interior of those that appeal to you.
- Express your likes and dislikes to your agent after you look at a home. Honest communication is essential. Many buyers are shy and afraid to tell an agent what they really think of a house. They think the agent might take it personally. Remember, the homes don’t belong to the agent! You must be straightforward about your likes and dislikes in order for the agent to do the best job for you.
Make sure your agent is aware of your time schedule and expectations. Do you like to look at one or two homes in a session? Four? Eight? Discuss this with your agent.
Make An Offer To Buy A Home
Your real estate agent can help you make an offer to buy the home that you want.There are two major investments to consider when buying a home. These are the initial investment, which includes down payment and closing costs, and the monthly payment, which includes principal, interest, taxes and insurance.
Minimizing your down payment
Gifts of money are always nice. (If you are this fortunate, be sure and leave a paper trail)
If you have cash you can put down 20% of the purchase price and you will not have to pay mortgage insurance.
Take advantage of rate lock programs that are currently available. You can lock in a low interest rate 30-45 days in advance.
Ask the seller to pay some of your closing costs as part of your offer. Sellers are usually allowed to contribute to a buyer’s closing costs–frequently 5 to 6%. This can be a part of your negotiations. Most sellers do not care whether the concession they make comes off the purchase price or as a seller contribution to your closing costs.
Choose a low down payment loan. You may put down as little as 3.5% down on some loans. With current low interest rates why not borrow operating money at the current low rates and apply your savings to paying down higher interest rate loans. that you may have
Shop around for your home insurance. A little shopping can save you money.
Good Luck and Have Fun Shopping