Whenever you’re ready to purchase a new home, you should make sure your credit report is up-to-date and free of anything that might make a negative impression. Many people believe they can afford more than they can, so make sure that your credit score is in the right range and if it’s not, then work toward building it up to the required score.
Lenders will look at a variety of financial markers when deciding to grant you a loan: monthly income, how long you’ve been with your current employer, and how much you have in assets both liquid and investments.
THE IMPORTANCE OF SAVING MONEY
You’ll want to save up as there are many upfront costs when buying a home. You should know that you’ll have to put down up to 20% down (of the total purchase price) along with closing costs and other fees. When you consult with your real estate agent, they will go through a list of these fees so you have a clear understanding of them.
When coming up with a savings plan, remember that you’ll need to consider some things like: how long until you purchase your home? How much do you have already?
Make a 1-3-year plan so you are completely ready and have enough cash on hand to cover all the upfront costs of the purchase.
FIND THE RIGHT REAL ESTATE AGENT
When buying a home, you’ll want to have a real estate agent. They will be able to handle all the details in a professional way so you get the best deal possible and make sure that all your bases are covered when it comes to negotiating, setting repair dates, and closing details.
A real estate agent will assess current market conditions against your budget and pre-approved loan to find the house you want at the price you can afford. They will know what to ask and help you negotiate on the spot if you find a house you like.
GET PRE-APPROVED FOR A HOME MORTGAGE LOAN
After you’ve got your finances in order and made sure your credit report is current, then you’ll want to take the next step and get a pre-approved mortgage.
Most home owners and realtors will want potential buyers to be pre-approved. In fact, you might not even get in the door to talk without pre-approval.
You’ll have to have good credit, a history of paying your bills on or before their due dates, and a debt-to-income ratio of 43% or thereabouts. Most lenders prefer that your housing expenses are 30% of your monthly gross income, so check that before going to your banking or lending institution.
PLACING THE RIGHT OFFER
In a buyers’ market, most buyers will bid well below the asking price of a home since there are an abundance of homes for sale. Most real estate agents will advise to go no lower than 10% of the asking price when low-bidding.
You will also get a quick yes if you accept the house in its existing state instead of asking for repairs. Often the seller’s agent will ask for your highest offer, but don’t go too high if you’re not completely in love with the house.
A buyer, of course, can always agree to pay the seller’s asking price without bartering.
WHAT HAPPENS AFTER OFFER IS ACCEPTED?
You’ll sign contracts once the offer is accepted. Additionally, you’ll pay your down payment and set any building inspection contingency dates. Your real estate agent will help you with this process so everything is done professionally and proper.
When the closing day arrives, you’ll do one last walk-through of the house and then you’ll begin the formal closing process. This is when the buyer, seller, and all parties involved complete all the paperwork and the title is transferred. The keys will be given to you, and you will deliver the payment to the seller.
Often a title representative will be on-site to subtract any funds from the sale to pay off the existing mortgage if there is one.
Finally, deeds, loan papers, and any remaining paperwork is filed with the local property record office.
Your real estate agent is the best source of information about the local community and real estate topics. Give the Bean Group a call today at 603-657-6787 to learn more about local areas, discuss selling a house, or tour available homes for sale.