The process of buying a home can be rather complex. According to the National Association of Realtors, for nearly 1/3 of buyers, who are searching for house for the first time, it may seem too hard and thus most first-time buyers could use a little guidance. Here are some tips which would help you stand out from the crowd.
PREPARE TO ACT IN ADVANCE
Lower home prices, higher inventory and lower mortgage rates would mean that the buyers can expect fewer bidding competition compared to years past. Even though it is not a buyer’s market quite yet, you’ll still want an expert to help you find the desired home and close as quickly as possible, especially during peak season.
BE AWARE OF YOUR CREDIT SCORE
Credit score showcases your history as a borrower and is a considerable factor in qualifying for a home loan. Request a copy of your credit report from TransUnion, Equifax and Experian. Comb through each report and work well to resolve any errors long before it’s time to make an offer. Getting a mortgage despite a lower credit score is a possibility, but the credit score improvement process can be very time-consuming and complicated. It’s best to get started sooner instead.
IGNORE 20% DOWN ‘RULE’
While larger down payments may be better in terms of potentially lower interest rates over time, 20% is not a hard and fast rule in order to qualify for a home loan. As a matter of fact, depending on the type of loan you qualify and apply for, it’s quite possible that you could bypass a down payment entirely. Explore your loan choices and determine which is best for you. Common options include Federal Housing Administration (FHA) loans, conventional loans, VA loans and USDA loans amongst other options.
WORK WITH THE CORRECT MORTGAGE PROFESSIONAL
Finding the right mortgage professional can help out a lot in aspects such as cost, flexibility and scope of services. Explore mortgage options from your local bank and consider a mortgage broker, like a loan originator at your local Motto Mortgage office, who can work with multiple lenders and recommend the best option to fit your personal situation and meet your overall financial budget.
BE PRE-QUALIFIED BEFORE YOU START FINDING A HOUSE
A pre-qualification letter will help focus your search, particularly in terms of price point, and identifying potential roadblocks, such as having too much debt. You’ll also stand out from buyers who haven’t gone through the pre-qualification process and could also be prepared to make an offer as soon as you find your desired home.
HAVE AN OPEN MIND
Some first-time buyers on a tight budget may find themselves ditching reality for HGTV. Make a list of wants and needs that is within your budget. Remember that cosmetic replacements and updates are always a possibility later. To quickly build potential equity, you could even invest in a fixer-upper!
KEEP YOUR FUTURE IN MIND WHILE SEARCHING FOR A HOME
It may be a wise idea to consider a home with a little room to grow in future. You never know when pets, children or career changes could come along and crowd a two-bedroom. Try to envision your life five to ten years from now and buy a house accordingly.
HOME INSPECTION SCHEDULE
Protect yourself and your investment with a home inspection in advance. A certified home inspector can identify structural, electrical and plumbing problems, like faulty wiring, termite damage or cracks in the foundation amongst other potential issues. Inspections come at a very small price for bargaining power and an in-depth understanding of your desired home.