Buying a home can be an
emotional, time-consuming, and
complex process. There are a few
things that you can do to help
make the process go as smooth as
possible:
1. Check your credit.
Before you apply for a home
loan, regardless of your credit,
it's a smart idea to obtain a
copy of your credit report from
the three major credit bureaus
and review the information. If
there are errors or things that
need to be addressed, it's
easier to address them before
you have found a house, than
after you have found a house and
are trying to close your loan.
If you know that there are a few
blemishes on your credit, let
your lender know what they are,
why they are there, and why you
are a still good credit risk.
Lenders look at your credit to
determine how likely you will
pay back the loan. If you had
extenuating circumstances - like
a loss of a job or medical bills
- let them know so that they
understand that it is not likely
to happen again in the future.
2. Get approved before
you buy.
An approval means that a lender
has reviewed your credit
history, verified your assets
and employment, and has approved
your loan before you have found
a home to purchase. As long as
the home appraises for at least
the purchase price, the loan
should close.
Getting approved also gives you
an advantage over other buyers.
Your firm approval makes it
easier for you to negotiate on
the price of a home, than a
person who is not approved or is
pre-qualified.
While getting pre-qualified may
sound official, it is really
just getting an idea of what you
can afford. Its having a person
plug in a few numbers that you
give them - your monthly income
and your monthly debt - and
getting an approximate payment
calculated. From the payment,
the calculator can approximate
the house price range that you
can afford. No information is
verified. Because your assets,
income or credit is not
verified, a pre-qualification
has little value when purchasing
a home.
3. Find a great buyer's
agent.
Traditionally real estate agents
represent the sellers in a
transaction. When you are not
working with a buyer's agent,
they are less likely to
negotiate the best price or
contingencies for you.
A
buyer's agent's job and
fiduciary responsibility
(meaning legal duty) is to you,
the buyer. Before working with
an agent, establish if they are
a buyer's agent or a seller's
agent. After spending a lot of
time with a Realtor, it's
natural to feel like you're a
team. But if they are not
negotiating for you, then they
are not on your team. |
