I often get the question from buyers, "where do I start?'' The home buying process can be rather complex but if you do you homework right, then it will leave you rather confident through the entire process.
*Start Saving Money-Seems hard these days with rising gas prices and our grocery bills going through the roof. However, down payment requirements are pretty low! FHA requires 3.5% and their are some special loan programs for buying bank owned homes where you can put as little as 3% down. The only options for 100% financing are VA and USDA. With a down payment of less then 20%, you are required to have mortgage insurance, and that number varies and will influence your monthly payment. Some loan programs require you to have reserve funds, so check with your loan officer to make sure you have the necessary funds to progress in the home buying process.
*Get a Credit Report- A credit report shows debts (good&bad), past late payments, payment history, and credit score. Most loan programs require a 640 credit score to qualify for a loan. Your loan officer will be able to walk you through your report and give ideas on how to improve the score if it is needed.
*Start the Pre Approval Process-Obtain a loan officer. This will tell you how much you can afford. They will require W2s, pay stubs, bank statements, work history, and rental history that is just to name a few items. You will need a pre approval to submit an offer and most sellers will not consider an offer if it is not accompanied with a pre approval.
*Ask About Additional Costs- In addition to the down payment requirement, the buyer will be responsible for other costs. A buyer has a right to a home inspection, cost between $250-$500. Their is also an appraisal fee and other charges associated with the loan and title, which are referred to as closing costs.
*Compile A Must Have List- This is the fun part but keep it realistic! Make sure you know the difference between your must have list and it would be nice to have list. Remember things can change over time. If your not loving the tile counter tops and prefer granite that can be changed!
*Identify Neighborhoods- Look at neighborhoods that fit your priority list. Make sure you evaluate schools, nearby conveniences, and commute time. These priorities can make or break a neighborhood or help you to decide between homes.
It is very important to know what your in for when jumping into the home buying process. Try and be prepared as best as you can. Its a fun and exciting process!
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