How to buy the home you always wanted
Buying a home can seem like a frightening prospect. Whether it’s your first home, or your fifth, 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.
How do you determine whether or not the purchase of a home makes sense? What’s the easiest way to examine the whole picture, from emotions to economics? This article should help you learn how to separate whims from true needs. You’ll discover how to prepare a game plan for your real estate venture, how to research effectively, choose wisely, finance appropriately and survive the whole procedure with your smile intact.
Step One: 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. Try taking the time to do this in writing - be as specific as you can about your particular requirements. Do you want a house? A condo? In the city or rural?
Step Two: 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 30-40% of your total monthly income.
Step Three: Get Pre-qualified Or Pre-approved By A Lender
You can save yourself a lot of time and heartache by meeting with a mortgage lender before you start your search for a home. This lender will 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 that you want.
Many lenders call this pre-qualifying. If you would like to be certain that you can be approved for a loan, you may want to ask to be pre-approved, which is a little more detailed than pre-qualifying but less involved than full qualification. In the approval process, all of your documentation is completed and submitted to an underwriter.
Step Four: Find A Good Real Estate Agent To Help You
You can learn a lot about a real estate agent by just letting them 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.
Questions for real estate agents:
1) Are you knowledgeable about the area of town and price range that we are interested in? (Some real estate agents specialize in only one area or one price range.)
2) Do you have the time to work with us? (This is especially important if you’re on a tight deadline.) What procedure will the real estate agent follow in working with you? How often will they update you with new property listings?
3) Can you represent me as my buyer’s agent? Ask as many questions as you can upfront. By finding a good real estate agent, you will save yourself huge amounts of time and effort.
Step Five: Find A Home That Meets Your Needs
1) Keep an organized record of all your research data. Write down comments about the homes that you see and keep track of your likes and dislikes.
2) Make sure your real estate 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.
3) Tell your real estate 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.
4) If you like to spend time driving around by yourself looking at homes, ask your real estate 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.
5) Express your likes and dislikes to your real estate agent after you look at a home. Honest communication is essential. Many buyers are shy and afraid to tell a real estate agent what they really think of a house. They think the real estate agent might take it personally. Remember, the homes don’t belong to the real estate agent! You must be straightforward about your likes and dislikes in order for the real estate agent to do the best job for you.
Step Six: Make An Offer To Buy A Home
Your real estate agent can help you make an offer to buy the home that you want. It is important to know beforehand whom your real estate agent represents. Some real estate agents work only for the seller. In this case the real estate agent may not be able to advise you what a fair offer to make is. By looking at what homes are selling for in the area and how long they are taking to sell, you should be able to get a good idea of value.
Step Seven: Save As Much As You Can On The Purchase
There are only 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.
To reduce your initial investment, choose a low down payment loan. You do not necessarily have to put 20% or even 10% down. You can pay 5% or even 3% down on some loans. You may also want to try to have someone give you money to pay closing costs. A blood relative, church or nonprofit organization can give you money for closing costs.
Tp help keep you monthly payments low, get a loan that doesn’t have monthly mortgage insurance premiums. You may be able to reduce or eliminate them by paying a little more at closing. By putting 25% or more down, you can eliminate them entirely. Take advantage of being able to lock in mortgage rates ahead of time, some lenders will lock in a rate for up to 120 days. You can also choose an adjustable rate mortgage, which can be up to 3% lower than fixed rates.
Now that you are done reading, it’s time to go out and find the home of your dreams! Make sure that you cover all of the steps in this report in the proper order. See a lender first. He or she will help you decide how much of a loan you qualify for. Then find a good real estate agent to work with - if you don’t have one, ask your friends and work associates for a referral.
———————————————————————————
Contact the Jeffrey Team for more information
