There are many things you probably don’t know about buying a house (e.g. choosing the “perfect” home, qualifying for a great mortgage). You don’t want to walk into this process completely blind. It’s important that you have a little knowledge about the process before getting started.
The First Step to Buying a House
Many markets have a shortage of homes for sale, which is why it’s vital for you to get a pre-approved loan before you start shopping. This will show the seller that you’re serious about buying their home. Of course, it also benefits you because you’ll know how much money you can afford to pay for a home before you ever start shopping.
Determining how Much you can Afford to pay for a House
First time home buyers in specific need to know how much money they can spend when buying a house. Usually most people are approved for three times their income – plus or minus a few percent. Of course, you should always take the guessing out of things by talking to a lender before you start shopping.
Information Regarding Rising Interest Rates
Today’s real estate market is being seriously impacted by rising interest rates. This is something that perspective buyers should be concerned about. It gives the process more of an immediateness – something you should do now instead of putting off until later.
Understanding Your Credit Score’s Impact
Unfortunately, many people who are buying a house don’t even know what credit score they need. While 620 (620 – 680 is considered average) is the minimum that mortgage lenders look for, some lenders will go down to 580. If you have 740+ you’re spotless and have absolutely no need to worry.
Determining the Down Payment
Gone are the days when you needed 20% down to buy a home. Now you can buy one with as little as 3% – 5% down as long as you’re not in a competitive market. In such markets you always want to have more to put down than whomever you’re competing against because the listing agent will go with whomever has more cash to bring with them to the table.
How Long the Process Takes
Over the past three years how long it takes to get to closing has become an even more important factor. Now we’re seeing the average closing time for a purchase and refinance loan only taking about 42 days. If you only have a refi loan, then it’ll usually take about 39 days. In the past you were looking for a period of 49 or 50 days regardless of what type of loan you had.
Sometimes when you’re buying a house, you’ll find that it needs a new roof, but the home is so great you want to buy it anyway. When this happens, you should know that Done Rite Roofing, Inc. can help you. Over the years they’ve put roofs on many homes that owners have just bought. There’s no reason you can’t have your dream home and a new roof too.
Picture Credit: paulbr75