Wow! Your thinking about buying a home? It's a big step are you ready? What do you do now? Where do I start? Let's get started on the thing you should know.
1. Do you know your credit score?
If you don't have a couple of hundred thousand dollars in the bank. You will need to get a mortgage to buy your home. In this situation you will have to make sure your credit history is as clean as possible. If you need to get a copy of your credit report try http://www.myfico.com/ you will be able to get a report from all three credit bureaus. If there are any errors on your credit report. Start to write your letters to fix any and all problems.
2. How much can you afford?
The rule is that you can buy a home that runs two and one half times your annual salary. That's the rule, but I would advise you to run the numbers. Only you know what your monthly expenses you currently have. There is a mortgage calculator on this site that will better help you to understand what your payment will look like.
3. How much to put down?
I know you have been talking to your friends and family and they have said you need to put down 20%. Let me relieve the stress: There are a variety of public and private lenders who, if you qualify you will be able to put down as little as 3% of the purchase price. There are loans with FHA.
4. What schools are in this district?
No, I don't have kids but should I worry about school districts? Yes, school's will effect you even if you don't have kids. Just remember if you will be selling potential buyers may have children and they maybe looking for a school districts that are top priority. This will help with your property value if you are in a great district.
5. How long can you stay?
Are you looking to remain in one spot for a while? When you are thinking about buying a home remember you will be there for awhile. If you want to move around maybe buying a home is not for you.
6. Help Wanted?
The Internet is a wonderful thing. It has hundred of home listings and you can view them all in the comfort of your home. But, when your a first time home buyer or even an experienced one you maybe better off using a professional real estate agent. Look for an exclusive buyer agent, if possible who will have your interests at heart and can help you with strategies during the bidding process.
7. What's the difference between points and rates?
When picking a mortgage, you usually have the option of paying additional points a portion of the interest that you pay at closing in exchange for a lower interest rate. If you stay in the house for a long time say five to seven years or more. It's usually a better deal to take the points. The lower interest rate will save you more in the long run.
8. Before you go house hunting get your pre-approval
Getting pre-approved will help you when you find your perfect property. It will save you the stress of trying to rush to get approved due to finding your perfect home and thinking someone may steal it away. It will also educate you on how much house you can afford and what your payments will look like. It will also put you in a better position to make a serious offer when your perfect house comes along. A pre-approval is based on the lender running your numbers, your credit history, tax returns and debt.
9. Bidding on a property
If you are placing a bid on a property and are working with a buyers agent. The agent should do there homework before putting in an offer. Your opening bid should be based on the sales of similar homes in the neighborhood. So before you make and offer do your homework on what other homes have sold for in the area.
10.The Inspection
You made the offer it was accepted the next move is to hire a home inspector. We use Jamie Schaefer http://www.jamieschaefer.com/ with House Masters. The lender will require a home appraisal, but that's the banks way to determine if the house is worth the price you are going to pay. You should hire your own home inspector to give you a detail report on what's going on with the home. The inspectors job is to point out potential problems that could require a costly repair bill. Jamie is one of the best inspectors I have come across and he takes pride in helping a homeowner with the largest investment they will ever make.
1. Do you know your credit score?
If you don't have a couple of hundred thousand dollars in the bank. You will need to get a mortgage to buy your home. In this situation you will have to make sure your credit history is as clean as possible. If you need to get a copy of your credit report try http://www.myfico.com/ you will be able to get a report from all three credit bureaus. If there are any errors on your credit report. Start to write your letters to fix any and all problems.
2. How much can you afford?
The rule is that you can buy a home that runs two and one half times your annual salary. That's the rule, but I would advise you to run the numbers. Only you know what your monthly expenses you currently have. There is a mortgage calculator on this site that will better help you to understand what your payment will look like.
3. How much to put down?
I know you have been talking to your friends and family and they have said you need to put down 20%. Let me relieve the stress: There are a variety of public and private lenders who, if you qualify you will be able to put down as little as 3% of the purchase price. There are loans with FHA.
4. What schools are in this district?
No, I don't have kids but should I worry about school districts? Yes, school's will effect you even if you don't have kids. Just remember if you will be selling potential buyers may have children and they maybe looking for a school districts that are top priority. This will help with your property value if you are in a great district.
5. How long can you stay?
Are you looking to remain in one spot for a while? When you are thinking about buying a home remember you will be there for awhile. If you want to move around maybe buying a home is not for you.
6. Help Wanted?
The Internet is a wonderful thing. It has hundred of home listings and you can view them all in the comfort of your home. But, when your a first time home buyer or even an experienced one you maybe better off using a professional real estate agent. Look for an exclusive buyer agent, if possible who will have your interests at heart and can help you with strategies during the bidding process.
7. What's the difference between points and rates?
When picking a mortgage, you usually have the option of paying additional points a portion of the interest that you pay at closing in exchange for a lower interest rate. If you stay in the house for a long time say five to seven years or more. It's usually a better deal to take the points. The lower interest rate will save you more in the long run.
8. Before you go house hunting get your pre-approval
Getting pre-approved will help you when you find your perfect property. It will save you the stress of trying to rush to get approved due to finding your perfect home and thinking someone may steal it away. It will also educate you on how much house you can afford and what your payments will look like. It will also put you in a better position to make a serious offer when your perfect house comes along. A pre-approval is based on the lender running your numbers, your credit history, tax returns and debt.
9. Bidding on a property
If you are placing a bid on a property and are working with a buyers agent. The agent should do there homework before putting in an offer. Your opening bid should be based on the sales of similar homes in the neighborhood. So before you make and offer do your homework on what other homes have sold for in the area.
10.The Inspection
You made the offer it was accepted the next move is to hire a home inspector. We use Jamie Schaefer http://www.jamieschaefer.com/ with House Masters. The lender will require a home appraisal, but that's the banks way to determine if the house is worth the price you are going to pay. You should hire your own home inspector to give you a detail report on what's going on with the home. The inspectors job is to point out potential problems that could require a costly repair bill. Jamie is one of the best inspectors I have come across and he takes pride in helping a homeowner with the largest investment they will ever make.
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