Preparation and confidence
Almost all potential home buyers are concerned about, what for most is, the largest purchase of a lifetime and going into debt for 30-years.
The best way to reduce these concerns is to be prepared and confident the price being paid is affordable and the financing favorable.
The following five steps will help buyer be prepared and confident.
1- Select where you want to live
List your top three community priorities such as commute time, schools, friends and family and recreational facilities. Ask your agent to help you identify some target neighborhoods based on your priorities.
2- Create a house wish list.
What are your must have items and which are ones you would like to have. See if you can come up with five must haves and five wants.
3- Determine how much you can afford to pay.
This is where talking to a good lender is a great place to start. They can explain loan programs and help you determine the amount of loan you can qualify for. Remember there are other costs such as property tax, insurance, community association fees, utilities and maintenance. Balance your wish list with what you can afford to pay.
4- Obtain a lender pre-approval
A letter from your lender indicating you are pre-approved for the loan you need to make the proposed purchase is a standard part of any offer. Items the lender will want to see may include W-2 forms, tax returns, employment verification, copies of pay stubs and several months’ worth of bank statements.
5- Understand what costs are associated with a home purchase.
Commonly referred to as closing costs these are in addition to our down payment. They include fees paid to your lender, escrow cost, title insurance, inspection expense and transfer fees just to name a few. These must be disclosed at time of purchase and don’t be afraid to ask your agent and lender what each is for. Finally include expenses to move and items which must be purchased immediately to make the home safe and comfortable. These items could include new locks, window coverings and appliances.
Everyone has heard the nightmare stories from friends and family regarding purchasing their home. The probability of a bad experience can be significantly reduced by being prepared and the five steps above will go a long way toward making buying a home a positive experience from starting a search to closing escrow and moving in.
