Whether it’s a first home or third, there are a few steps every homebuyer should undertake before beginning their search in earnest.
While its not a requirement before searching for a home, its smart to receive pre-approval for a loan in advance. For help finding a loan, ask a realtor for the names of mortgage brokers who can review different companies and compare rates. Additionally, don’t forget to consider small local banks and credit unions as they often have competitive rates too. Although pre-approval tells a buyer how much they can afford, it’s a good idea to keep the mortgage payments to approximately 20 to 30 percent of total income.
There’s several different types of mortgages, 15 years, 30 years, VA loans, etc., and each has different benefits. Talk to a banker about what can be afforded monthly and ask if he or she thinks interest rates will go up or down in the weeks leading up to closing. Also, when applying for a mortgage, its important to not move around large sums of money. The bank needs a few months of checking and savings account statements to confirm the buyer can afford the loan and has the money for the down payment.
Find an honest realtor
There’s lots of real estate companies and agents in the market, but a good one listens to a buyer’s wants and needs, then makes suggestions based upon those and what fits within the budget. An honest realtor also keeps their client in mind throughout the home searching and buying process, with the goal of minimizing any complications that may arise.
Find a home
Finding the perfect home is not always easy and can sometimes be a long process. Along with the realtor, discuss neighborhoods, school systems, routes to work and distances from shopping or restaurants in order to locate the perfect property. Once selected, the realtor will put together a good offer and if accepted, will help negotiate the details.
After an offer is accepted on a home, the next step is scheduling a home inspection, which looks for hidden problems. Finding a good home inspector can be the difference between moving into a home that’s been repaired and secrets revealed, versus a home with hidden surprises such as termites, mold or leaks. The realtor should have a list of reliable and trustworthy home and mold inspectors.
Once the home inspection is complete and all parties are comfortable with the terms, its time to prepare for closing.