You don’t have to feel overwhelmed with the process of home buying, because you’re not alone! There was a survey done and these Homebuyer surveys find that a lot more people today want to buy a home then years past, but sometimes things get in the way such as saving for a down payment and recent student loans.
More often then not, home buyers use online searches to aid in finding the home of their dreams. (That’s probably how you came across this website!)
But, before you pick out your dream house online, consider these 7 facts before starting the buying process.
1. Learn as much as you can thru seminars or classes. There are seminars and classes for first time home buyers that our company and mortgage lenders give so that you are as informed as you need to be before you start searching for your dream home. Some classes are requirements to qualify for some of the down payment assistance programs that are out there, but all buyers can benefit from the classes. You will learn the process of buying a home, how to improve your credit, the terms you will come across while going under contract and then while going thru the loan process. There are resources to help you clean your credit up and help you plan a budget.
2. Get an agent. Even if you haven’t started the process yet, there is no time like the present to have an agent. The commission to pay for your agent’s time will not come from you. We will be paid at the sale of your home you buy and the commission is paid by the seller customarily. We do more then just show you the home, we help you understand the process, and negotiate all the terms of a contract, keep you on task with everything that needs to be done after you are under contract, and help you with referrals of inspectors and more. Having an expert will help you tremendously.
3. Find your lender. Your lender will help you obtain a loan for your new house, help you to know your options on what type of loan you would qualify for, help you to know how much money you will need for the process, refer you to a credit counselor or credit repair company if one is needed.
4. Know that your credit score is important. Depending on your score your interest rate you will pay on your home loan will fluctuate. There are other factors that come into play regarding what kind of loan you will qualify for also. The better your credit score, the more affordable your loan can be and the more buying power you will have.
5. You don’t need 20 percent down. You may have heard or read that you need 20 percent down. It’s not necessarily a bad thing, but it’s not always the case. And, if using a low down payment can get you in a home now (instead of 3 years from now), you’ll enjoy low rates and get out of a rising rent situation. Low down payment options have been around for a long time.
6. Down payment programs offer savings. Many homebuyers don’t know about homeownership programs that can help them get in a home much more quickly and provide a valuable cash cushion for other home buying expenses. Ask your lender about down payment programs.
7. Don’t forget to budget closing costs. Most buyers focus on saving for a down payment, but your closing costs can run between 2-6%. It’s important to factor in those costs so you are prepared for the closing table. Ask your agent about negotiating those costs with the seller.
Now, you’re armed with 7 of the most important things you need to know about becoming a homeowner.