Be A Savvy Home Buyer

You have just decided it is time to buy a home but you are not sure where to begin.  I am going to walk you through the process and give you important tips that will make the process a little less stressful.  After all,  this is a very big decision emotionally and financially.  So be prepared by fully understanding the entire procedure from beginning to end.

  1. Get pre-qualified or pre-approved.  To begin this process the first thing you should do is decide on a lender.  You may want to first check with your financial institution because you have a history with them.  They already have certain information about you and your habits that may make the process smoother.  Having said that however, ask what programs they have.  Do they have any speciality loans that you may qualify for?  Are you a veteran, do they do VA loans?  Do they give assistance to first-time home buyers?  While a lender earns money on the interest of your loan they also may charge a fee for the preparation of that loan.  Find out what they charge and what other out of pocket expenses you may incur during the transaction.  What is the minimum down payment that they require?  What is the interest rate they charge?  Do they expect any fluctuation in that rate during the time you will be looking for a home?  Are they offering a fixed rate loan, this means your rate will not change for the entire length of the loan?  Will they lock in your rate?  What this means is if the rate is 3.5% today and you plan to buy a home within the next 30 days, can they put in writing that they will guarantee you that rate in the event the rates increase.  If the rates drop you are fine and will get that lower rate.  I know this is a lot of information but the better informed you are, the better prepared you will be to make the right decision.  Another bit of information is that the lender will most probably quote what is called PITI.  That stands for Principal, Interest, Taxes and Insurance.  Some lenders will not include in your mortgage payment Taxes and Insurance - check what your lender does and decide what is best for you.  Now after you gather all of this information, compare rates with two other lenders, sharing all the same information so that you are comparing apples for apples.  Keep in mind you CAN negotiate with the lender.  If you have a preference and another lender offered you better rates, go back to your favorite lender and discuss what you were offered.  They may meet that rate or offer a better one to you. If they charge a fee that I spoke about earlier, called an origination fee and points, you may buy down points to get a better rate.  I know it really does sound confusing, but the lender will explain it all to you.  

  2. Criteria.   Now that your lender has given you a purchase price for what you qualify for, lets talk about the next step.  It is time to sit down and think about what you want in your new home.  What are the amenities that you cannot live without?  Do you want an open living space, do you have to have a minimum of two baths, three bedrooms.  Do you want central air conditioning?  Jot down all the things that are important to you.  Also make a list of things that you absolutely cannot have.  You do not want to park on the street, so you must have a driveway.  You want to live near a school but not right next to one.  I found that people did not consider a view.  Later they were sorry they never thought about that, do you want an active view or a passive view?  Do you want to live in a cul-de-sac?  Do you want to pay association fees, many developments have fees for the common area grounds and amenities, and for these they charge a fee.  These are just a few things to consider when making your list.  Now I must tell you, be prepared to compromise on some of your have's and have not's.  You may not find everything to be just perfectly matching, however, you can come close.

  3. Choosing a Real Estate Agent.  It is time to look for a real estate agent to work with.  It is advisable to work with one agent through your entire process of searching for a home.  This agent and you will forge a relationship to the point where the agent understands exactly what you want, where you want it, and what you qualify for.  Do you really need to work with an agent?  The process of buying a home is a complex process and if you have an agent by your side, the complexity of it can be minimized.   This is their field and they understand the procedure and can make the most complex purchase pain free.  When you find the home you want, there are many things that need to happen and your agent will know the right people to help you. The agent will prepare the offer for you and will negotiate the price with the seller's agent. You will be dealing with a title company, an inspector, an appraiser and a surveyor just to name a few.  Your agent will give you a list of vendors who they have used in the past or are known in the community, three in each category, and you can easily choose one of them or one of your own.  Use the agents expertise to make your buying process easier.  Ask the agent to provide you with a set of the type of documents you will be signing.  This way any questions on the language of the contract can be answered before you are writing an offer on the home you have chosen.

  4. Communicate.  More often than you can imagine, the parties involved in the selling and buying of a home, fail to communicate with their agent, lender and other parties to the transaction.  It is imperative that you are prepared to send the lender the paperwork they need and meet all the guidelines in the contract.  Your agent will keep you abreast of all deadlines and with your cooperation, all contingencies can be met before the deadline passes.  If you understand the process ahead of time, you can be better equipped to handle the passing back and forth of the paperwork that goes into the buying and selling of a property. Whatever you are feeling, share those feelings with your agent, your lender and those that are helping you complete this transaction.  You are soon to be a HOMEOWNER and that is exciting.  Enjoy yourself along the way and create memories that you can cherish for a lifetime.

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