Make Sure You are Ready to Buy a Home
“When should I buy a house?” If you’ve been on the fence for a while, it’s understandable. After all, buying a home is often your largest financial investment. Let’s make sure you’re ready and it’s the right time.
Do You Have the Funds?
How much have you saved? Even though a 20% down payment isn’t always required, that doesn’t mean you shouldn’t try to put down as much as you can. The less money you have for a down payment, the larger your mortgage will be. You also need to allow for closing costs, which you’ll need upfront.
Check out our mortgage calculator to help you assess how much house you can afford.
It’s also a good idea to get a mortgage pre-qualification. This is an informal process that provides an estimate (but not a promise) of what a bank might lend you based on your self-reported finances.
Does the Home Fit Your Needs?
The housing market in your desired location also plays a role in whether it’s the right time to buy a house. If there’s low inventory and homes are selling for well over the asking price, it might be better to wait. This is especially true if there are no houses that truly check off all your needs. You may have buyer’s remorse if you pay too much for a home that’s not right for you and your family.
Use a Trusted Realtor to Find the Right Home for You
When you have a trusted realtor who knows the local market, they can help you understand the trends and take advantage of opportunities. Would it be better to wait six months until the market cools off? Is there a perfect property about to be listed? That’s the value of having an experienced real estate professional at your side.
What Do You Need to Buy a House
Once you’ve decided to move forward, your next question is: “What do I need to know about buying a house?”
Assess Your Credit Score
First, find out your credit score. You can request a free copy of your credit report from each of three major credit reporting agencies once each year at AnnualCreditReport.com.
Your credit score helps your lender predict how likely you are to repay debt. It’s calculated using data from your credit reports. In general, a credit score above 720 results in the best interest rates for a mortgage. If your score is lower, you may want to work on repairing your credit before starting your home search.
Have Proof of Income
Before you head to the bank, make sure you have documentation ready. Lenders will require the following information to start the mortgage pre-approval process.
- Proof of income and assets (Pay stubs, bank records, or investments)
- List of debts (Revolving debt, such as credit cards or car payments)
- Tax documents (Lenders usually require one to two years of tax returns)
- Credit history (Your credit reports)
Check for Home Loan Options
To meet the varied financial needs of homebuyers, there are many different loan options available beyond a conventional mortgage. Government mortgage programs were created to make homeownership possible for more Americans. Examples include the FHA loan, VA loan, and USDA loan. Each program has different eligibility requirements, so it’s important to ask a trusted lender about whether you’d qualify and how the application process works. There are also many loan options for first-time homebuyers.
How to Make an Offer on a Home
The final step in the home buying process is making an offer. You’ll work with your real estate agent to decide what to offer on a house. Consider your budget, comparable homes on the market, how long the property’s been for sale, the condition of the home, and whether there are competing bids.
If the seller wants to negotiate, remember that price isn’t the only variable. Many elements of the transaction are negotiable–timeline, concessions, closing cost assistance, fixtures, home assets, etc. Talk to your real estate professional about how you can get the results you want–without giving up too much.
Secure Your Home with Title Insurance
Once you have an agreement, it’s time to set a closing date. Closing on a house is the last step in a real estate transaction. As part of that process, you’ll want to purchase title insurance. This one-time payment can protect you if a lien or claim arises after your home purchase. Title insurance can help cover legal expenses related to filing errors, title forgeries, liens, inconsistent or conflicting wills, or undocumented easements.
To learn more, contact a professional at Trident Land Transfer Company. As part of the BHHS Fox & Roach family of companies, we’re here to provide everything a homebuyer needs.