Many of us who are considering buying a house start by going on line or driving around neighborhoods to see what’s available in places where we think we’d like to live. Sure…that’s fine BUT before we “see” a home that’s for sale and fall in love with it, here are some things to do first. Save falling in love with a home until AFTER you’ve done these things.
- Get an idea of listing prices on homes that are comparable to a home you need. Need translates into the specs that you and/or your family must have such as number of bedrooms, number of bathrooms, single or multiple level(s), yard, garage, etc. Need does not translate into things you want. Look online at sites such as Multiple Listings (MLS), National Association of Realtors (NAR.), Trulia or TeamHeidi.com
- Use a Mortgage Calculator to get a sense of what your monthly mortgage payment would be. BankRate, Zillow, any bank/lender and again, Team Heidi.com have Mortgage Calculators on their websites.
- Get a handle on what your total monthly housing costs would be – include the estimated mortgage payment, insurance costs, (call an insurance agent – tell her/him you just want an estimate…you’ve no requirement to use that agent), property taxes (go to a property appraiser’s website…again, you’re looking for estimates only), Home Owner’s Association fees (if there is an HOA for the property), etc.
- Find out required closing costs – fees charged buy a lender, title and settlement fees, taxes and prepaid items – go to Bankrate.com to check out its annual closing cost survey by states as a place to begin.
- Take a very hard, honest look at your budget – is a house even doable? Freddie Mac/Fannie Mae suggest that buyers take on no more than 28% of their yearly income for a down payment on a home.
- Again, take a very hard, honest look at your budget – you may need to fix a leaking roof or buy new appliances or repair plumbing problems – are those unexpected things that need fixing and/or replacing doable?
- Talk with local realtors about the climate of the market – is the market hot, has it bottomed out, is it rising?
- Take a hard, honest look at your credit history – get an annual credit report and make sure it’s accurate – if there are errors, fix them.
- Line up all your financial documents – pay stubs, bank statements, W-2 tax forms, statements about current credit loans and credit lines – lenders may want all those things so have them ready and at hand.
- Get yourself pre-approved by a lender if/when you find a house you want to buy – being pre-approved for a loan puts you in a powerful bargaining position if and when you find a house you want – apply to several lenders on the same day to improve your chances of getting a loan approved at the very best rate possible.
- If you’re denied a loan by a conventional lender, try again and this time, try applying for a Federally Housing Approved loan (FHA) as well as conventional lenders. The FHA has a program to insure mortgages for first time homebuyers AND currently, the FHA requires a down payment of only 3.5%. A 3.5% down payment on a home is VERY different from the usual 20% down payment on a home required by conventional lenders.
Now that you’ve done all these things, start looking online, driving around neighborhoods you like, and finding a house you can both love and afford to love.
At TeamHeidi we can help you with all the above listed items and more. We do it every day, helping over 100 buyers a year. We even have a lender on our team, Karyn Carroll of TowneBank Mortgage.
Call us today, we’ll make it simple and seamless!!