If you’re here reading this right now, you’ve started pondering the possibilities of owning a home. What does it really take to buy a home? How long will you have to wait once you find one you like? It’s best to know the proper steps and be prepared before moving forward.
Your Credit Counts
You’re starting to think about buying a house, but do you know your credit score? When did you last check to see if there were any errors on your credit report? Due to the Fair Credit Act, you can order a free copy of your credit report from the three major reporting agencies once a year. Take advantage of this opportunity and request a report from Experian, Equifax, and TransUnion. You can access these online, print copies, and check them over in the comfort of your living room. Note and delinquent accounts and make plans to take care of them as soon as possible. Report any errors you find. While you may be able to get a loan with a lower credit score, you’ll end up paying a higher interest rate. Do the damage control early on to get a better rate.
Timing is Everything
The home buying process can be a bit like juggling. You must make sure everything lines up without dropping the ball on an important step. It’s a good idea to seek the advice of a real estate professional right now. Even if you are months away from looking at homes, they have valuable information on the process. For example, they know the typical selling rate in your area. This helps when you must line up time periods for moving from your existing home, or you need time to save some money. You don’t want to find yourself stuck between homes or missing part of your down payment.
Get Pre-Approved to Buy a Home
Your real estate agent can advise you on the best time for getting your pre-approval for a home mortgage loan in the works. While you could move forward without one, it’s a good idea to get a pre-approval for several reasons. First, it nails down the price range for your home search. There’s nothing more frustrating than getting your heart set on a home and finding out it’s outside of your budget. A pre-approval can benefit you if the seller has multiple offers. Your pre-approval letter shows the seller that you’re serious about buying and can follow through to the end.
Money in Savings
You’ll want enough money in savings to cover a down payment and closing costs. The down payment may be around 20-percent of the selling price, and the closing costs can be up to 8-percent. Consider the need for moving expenses and unplanned costs, and you’ll see that it’s better to have more money than you need rather than come up short.
Be Aware of Delay Possibilities
You can do everything on your end to plan for a successful transaction, but some things are out of your control. Still, it’s best to be aware of them. Before you mortgage loan is final, the lender requests an appraisal of the property. If the appraisal comes back on target, all is well. If not, expect to head back to the drawing board to renegotiate the price. Look out for contingencies. In some cases, a seller must buy a new home before they can move. This could push back closing day and cause a delay for you.
To limit delays, make sure you stay in contact with your real estate agent and get clarity on any areas you don’t understand.
Your real estate agent is the best source of information about the local community and real estate topics. Give C.A.R.E.S. a call today at 505-435-9700 to learn more about local areas, discuss selling a house, or tour available homes for sale.