If you are considering the purchase of a new home, there are several steps to the process that if done properly will make your purchase experience more enjoyable and less stressful. Listed below you will find a brief description of each step in the process as you prepare to look for your dream home.
Selecting A Mortgage Lender – It is crucial that you begin the mortgage loan process well in advance of beginning your search for a new home that you would want to purchase.
(1) Loan Options – Take the time to speak with several lenders to determine what types of loans are available to you. Talking with mortgage companies, financial institutions such as banks, credit unions, and savings and loans will allow you to determine what program is best for you and the opportunity to compare rates.
(2) First Time Home Buyer – Many lenders offer programs specifically designed for first time home buyer. If you qualify, these special programs provide terms that include minimal money down, low interest rates or federal programs that provide one or both.
(3) Financial History – As with all consumer loans, home mortgage interest rates will be directly related to your credit history and debt-to-income ratio. When you have a good credit history and limited debt load, then you automatically qualify for a better rate. If you are in a less than ideal credit situation, your lender can provide advice and a plan of action to help you improve your current credit score and earn a better rate.
(4) Types Of Loans – Your trusted loan officer will review your credit file and discuss with you which loan program is best for you and how much you can borrow. He will then move forward to get you pre-approved and provide you a pre-approval letter.
(5) Pre-Approval Letter – The pre-approval letter will allow you to focus on homes that are in a price range that are realistic for you and also show potential seller’s that you are a serious buyer as you begin the home buying process.
Selecting A Real Estate Agent – Just as you interviewed and spoke with several mortgage lenders, you will want to speak with several agents to be your Buyer Represenative. The agent you choose can research for homes within your price range that meet the other criteria that you have provided them. They also can preview homes for you in advance or arrange to preview the homes with you. When you find a home you want to make an offer for, they will prepare a contract to offer to the seller and assist you with any and all negotiations. Yes an agent receives a commission, but that fee is paid by the seller and not you. Besides, an experienced agent will be a valuable asset with their knowledge of local communities, the real estate market current trends, schools, etc.
Buying a home should be an exciting time and if you will follow the simple steps within the process, you may find the experience more enjoyable and less intimidating. Source: Old Republic Title
Steve Lester is a REALTOR living in Allen, Texas.