This post was written by Lisa Perta at Benchmark Morgage.
For many people, buying a home is a dream come true. It is often the most significant investment many of us will ever make. Because buying a home is such a big financial decision, prospective buyers should take the time to educate themselves on the basics. Before you begin your journey on the road to homeownership, here are a few important things you should know.
Your credit score is one of the most significant factors when it comes to getting the best deals. A score of 700 to 720 will get you a good deal, and 750 and above will garner the best rates on the market. So before you start shopping, improve your credit score as much as you can. The better your score is, the easier it will also be for you to get approved for a loan.
The right real estate agent can make or break your home buying experience. Because every area is different, you want to find a skilled realtor who is informed about the region in which you are looking. Choose an agent you are comfortable with, who understands your concerns and priorities. Interview several different realtors to find the right one.
Before you begin seriously looking at listings, you should be keeping track of the condition of the market in the area where you are looking to buy. Know what homes in the area are worth and how long those homes stay on the market. Analyze the trends in your most desired neighborhoods, and you will be one step ahead in the real estate game.
Before touring your first listing, you should get a mortgage preapproval. This way, you know the types of loans you can get based on your current financial situation. Having a pre=approval letter can also make you more appealing to the sellers. Sellers want to know the buyer is not going to get turned down for a loan, forcing them to start the entire selling process all over again. To get pre-approved, make sure you compile a host of financial information, including income, debts, and assets.
Generally, homebuyers are expected to put up anywhere between three and twenty percent of the price of the property as a down payment. Again, your credit history and loan terms will help to determine how much you will need to come up with for each listing. You can also learn if you qualify for down-payment assistance. This is usually based on location or for particular buyers, specifically first-time buyers.
This seems obvious. If you are buying a home, especially with someone else, it is essential to keep both of your priorities in mind to ensure you find the right house to fit both your needs. It is recommended that you write them down and continue to revisit the list throughout the home buying process, to make sure you are on track. After all, this is the home you will have to live in for years to come. Make sure you buy a some that will meet your needs and lifestyle.
This is one that buyers often forget, or do not even consider as being important. When shopping homes for sale, you should make it a point to speak to different homeowners who live in the neighborhoods in which you are looking. They will be able to let you know about parking in the area, how safe it is, or just let you know how they like living there. It’s a simple step that can help you understand what you’re getting before you move in.
It goes without saying: making a huge purchase you cannot really afford is not a sensible thing to do when buying a home. Build up your savings, putting money in a specific account for all things related to your home purchase. And if you’re approved for a loan that is above what you are comfortable paying for, don’t go through with it. Only mortgage as much money as you are comfortable with and don’t live beyond your means.