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Are You Following These 5 Home Buying Steps?

It is a leisurely Sunday and you have been driving through neighborhoods looking at houses. It is time to know the 5 best-kept secrets about buying a home. Knowledge is power in the real estate scene. Know what you need to do before shopping for a home. Find out the things to look for in a new home.

1. How much home can you afford?

It is always a good idea to figure out how much you can spend. Face it, mortgages range from 15, 20, 25 and 30-year mortgages. A mortgage is the single largest investment and asset of your life. Use a good mortgage calculatoras a guide to determine the numbers.

2. Get your finances in order early

Mortgage companies want your pay stubs, account statements, and credit history right up front. Make sure your finances are stable. Pay your usual bills on time. Don’t buy any big-ticket items a few months before applying for a home loan.

Check your credit. A current credit card in your possession probably already offers a credit check service for free. If you are uncomfortable with using a company you do business with checking then check out frequently use credit checkers to check yourself.

  • No, checking your own credit does not lower your credit score.
  • Yes, your credit score is important, the higher the score the better the interest rate you receive on a new loan.
  • Resolve any discrepancies on your credit report before you go house hunting.

3. Get a reputable Realtor

A licensed realtor does not cost you anything until you buy your home. Realtors get paid at closing by percentage of the sale. Ask around and people you know who have bought or sold a home recently for a recommendation.

  • Realtors are licensed and trained
  • Your realtor works for your interest.
  • Networking is a good realtor’s advantage
  • They have tools and resources to get you the best deal.

4. Get pre-approved for a Mortgage

Your realtor will show you home but the first thing you and the realtor need to know is how much house can you afford. The amount you qualify to borrow and spend is maybe a bit more than you anticipated. When the amount is bigger there is no reason to look at homes and borrow lower. Looking at homes below your borrowing threshold gives you wiggle room. You will have room for negotiation, surprises the loan underwriters find or when life changes the numbers when you are in your new home paying your monthly mortgage payment.

5. Check everything before buying

A home inspector to checks out the structural elements of the home, as well as: heating and cooling, plumbing, roof, electrical, insect infestation, moisture issues and anything troublesome.

Drive or walk around the neighborhood. Talk to the neighbors. A great resource to check for sales, taxes, schools and other aspects of your home and neighborhood is Zillow. They have tons of information on homes for anyone to investigate.