As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with the financial side of purchasing a home. It is a process and an offer MUST be accompanied by a pre-approval letter indicating you can afford the property.
Get pre-approved. A pre-approval letter from a lender will indicate to the seller that it is a serious offer when you do find the right home. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. If you do not have a lender I can send you names of mortgage loan officers I have worked with. Just email me at firstname.lastname@example.org.
Choose your mortgage carefully. Your lender will be able to explain all of your options once they have your credit score….but be careful about giving out your social security number to several lenders as it may have a negative impact on your score! In general the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good.
Research and Analysis. Before you make an offer on a home it is wise to start looking on-line, visit some open houses and then for us to seriously start the search and information process. This process can take a few months or over a year depending on your motivation, downpayment, life plan, etc. I will go over comparable sales in the neighborhood and historical data so that you can make an informed decision of the amount to offer and all of the auxiliary forms that may be required such as lead paint, seller’s statement, agency disclosure, etc. Once your offer is accepted there are the additional steps of home inspection, purchase and sale agreement and a final walk-through. I will be with you every step of the way!