Looking to buy a home? Here are four essential tips for making the process as smooth as possible.
Get your finances in order.
Start by getting a full picture of your credit. Obtain copies of your credit report. You can get yours for free at Credit Karma. Make sure the facts are correct, and fix any problems you find. Also you will want to have saved for a downpayment, typically minimum is 3.5%, and closing costs which could total 2-3% of the purchase price.
Find a good mortgage lender.
Talk with 2-3 lenders to compare mortgage rates, fees, how long it takes them to close on a loan…Ask them to explain their loan process. They will help you understand how much $$ you qualify for and what monthly payment you are comfortable with. Once you have selected a lender you are comfortable with get a pre-approval letter. Homes are selling fast and you will need a current pre-approval letter to make an offer when you do find the right home.
Find a house you can afford.
Mortgage payments typically consist of a principal payment, interest, property taxes and home owners insurance – PITI. If your downpayment is less than 20% you may also need to pay Private Mortgage Insurance – PMI. Keep in mind you will have additional household costs for utilities, internet…
Hire a professional.
While the Internet gives buyers unprecedented access to home listings and resources, many aspects of the buying process require a level of expertise you can’t pick up from surfing the web. Inventory is tight. Your Realtor may have access to homes coming on the market. And they can help you understand what homes are selling for and put together a competitive offer. These are just a few reasons you’re better off using a professional Realtor who knows the market & neighborhood; who will have your interests at heart and can help you with strategies during the bidding process.
Think mid to long term.
Ideally you will want to be in your home at least a few years since you paid closing costs to buy and you will have closing costs to sell. Before buying, you should hire your own home inspector, who can point out potential problems that could require costly repairs in the future.