It's very tempting to rush off and begin looking at houses as quickly as possible, but if your financial house isn't in order first, your physical house never will be. We offer tips on how to check your credit and develop a budget. It's also good to pay off small debts and do not incur any new debt.
It's fine to want the best home you can afford, but be certain that it is comfortable affordability. The traditional ratios--the mortgage payment as 28% of your income and the total of your mortgage payment plus your monthly debt payments as 36% of your income--are good basic guidelines to use in your budget.
Begin to gather items for your mortgage lender such as the last 3 years Income Tax returns, current copies of pay stubs, records of any past derogatory credit history that has since been paid off, and records of any supplemental income you may have. If you are self employed, you will need all business records and tax returns for the last 3 years.
Familiarize yourself with the mortgage process. This will help you determine what you can afford and will limit any surprises during the mortgage process. Consider all types of mortgage loans, including fixed or variable rates, 15 or 30 years, and closing costs. KPOCU can offer your Tips in finding the mortgage that's right for you. Once you have a general idea of the type of mortgage that best suits your situation, the next step is to begin to make comparisons among the lenders that are available. Weekend newspapers will often have the rates of individual local lenders posted in their Real Estate section. To get the specifics of each lender's rate and term, you can contact them directly.
Now you are ready to pre-qualify for the mortgage.
Finding an Agent
Since the commission for the sale of a house is almost always paid for by the seller, buyers are able to get assistance and information from Real Estate Agents, usually at no cost to them. It is for this reason that the vast majority of home buyers employ the services of an Agent for their purchase. In addition, since most houses are listed by Real Estate Agencies, it gives them the maximum number of available properties to consider. The relationship between a home buyer and a their Agent is a little like a marriage: it must be based on trust, mutual goals (to get you the house that best suits your needs!) and understanding. To a large degree, the home buyer entrusts the Agent to always keep their (the buyer's) interest first and foremost. It is important that you understand who the Agent with whom you are working represents.
Finding a Home
Once the decision to buy a home has been made, take the time to prepare before you go on your home search. Get familiar with the different housing types and styles available to narrow your search.
Determine your minimum requirements as well as any desired additional features--your needs and wants. Take note of any items that you don't want in a house. Determine the desired location (schools, work, public transportation, etc.).
When you go hunting for a house, one of the first things that you will notice is that after looking at two or three properties, the features of the houses seem to blend together. It becomes difficult to remember which house had the master bath and which house had the wonderful deck overlooking the woods. An easy way to overcome this confusion is to maintain a written list of features of each individual house. Not only will it make your search easier, it will help immensely when it comes time to eliminate potential choices. Your agent can provide you with a "brief" for each property which will list room sizes, features, and property descriptions. Get familiar with the inspection process--especially the personal inspection aspect, so that you can weed out unacceptable houses quickly.
And, most importantly, maintain your perspective--and your cool! You may find an acceptable house on the first day--or the tenth. The important thing is to get the home that is best for you!
Once the perfect home has been found, it is time for the sales contract. Remember that what you are signing is a legal contract; you are not just making an "offer". To put it simply, if what is written on the contract regarding selling price and provisions is accepted by the seller, you have bought a home.