Home-buyers tend to have a difficult time with getting organized for the financing of their shiny new house. Well, we have some tips to help prepare you for the process. With just a little knowledge about what to expect, a home-buyer can make the whole process quick and smooth. It can all be broken down into four simple steps to get a head start.
1. Check your scores. Surely, you have already heard about the FICO scores or your credit scores in the past. Before even looking at houses, make sure that your score is up to par. It is free to get a copy of your credit reports from all three bureaus once every six months. Use these as goals. Try to remove any bad markings that might be on these reports. For instance, if you had a water bill that you owed from your old apartment, it might show up on here. Try to take care of this before looking into financing your new home. It will easily raise your score a few points. These scores determine the monthly cost that you will incur and the down payment needed for this new mortgage.
2. Get a price range. Talk to some banks or lenders ahead of time, so that you can figure out what price range to expect to stay within. There are absolutely beautiful houses in every price range, so why buy one that you can’t afford? So, don’t fret if the numbers that they tell you aren’t what you expected. Also, there is always the option of buying land outside of the city then build a custom house within your price range on that land. This way you can get more house for your money.
3. Build a relationship with your lender. This can really benefit you in the process. When you have a good relationship with the lender’s representative that you are dealing with then you can save time and even money. You want this person to know your situation so that they can keep an eye out for great financing deals out there. Especially, make sure that the rep has good knowledge in first time home-buying, because first timers get a lot of perks.
4. Save enough. When saving your money, make sure to save enough to cover the closing costs, down payment, and first year’s taxes/insurance. You don’t want to have any surprises that might make getting your wonderful new home more difficult. It’s best to talk to the lender to see what the whole amount needed would be and if you have a financial advisor then also consult them on the subject too. People forget about having to pay the insurance and taxes that will be due at the beginning of the new mortgage. Sometimes mortgage companies will build this cost into your monthly payments to ensure that it gets paid each year, so if you think that this might be beneficial to you then ask them if they offer it.
See, it’s simple to purchase that home for you and your family if you just know what to expect. Now go get your papers in order!
Your tip about building a relationship with your lender was very enlightening. My brother and his wife have been trying to find a good home and haven’t had very good luck. Do most real estate agents and lenders work together to help people find the right priced home? It looks like hiring an agent and finding a good lender could be very helpful in their process of finding a good home.