Are you a first-time home buyer? Or haven’t purchased a home in a few years?
You have reached the right place. So, read on and to know more what first-time home buyers or those that haven't purchased a long time should consider.
The first thing is, making sure that you have your financial and credit house in order. What does that mean? Well, first of all, find out what your credit score is, you can go to annualcreditreport.com or creditkarma.com to determine your credit score. You want a credit score of 640 or higher to be eligible for most loan programs. Now there are some loan programs that go as low as 580. If you know what your credit score is ahead of time, you can work on it a little bit and get it a little bit higher, so that you can get a lower interest rate. This will save you a lot of money over the long run.
Make sure that your financial house is in order. Now you’d want to prepare approximately 3.5% down payment. Some loan programs like VA loans, do not require down payment and there are also a down payment assisted programs. Remember that you're also going to need closing costs. Closing costs usually run about 3%. These include the cost for title and escrow. These are the costs that are necessary to pay them for handling the transaction. There are also the lender fees, for the privilege of borrowing the money, the credit report and the appraisal fees, like I said, they usually run about 3%. You can ask the seller to assist you with these costs.
Remember though you don't want to use all your money for the down payment and closing costs, you want to make sure you have some money left over to handle little emergencies. For instance, if the air conditioner breaks it is degrees out, or your hot water heater breaks. Those little emergencies turn into big emergencies really quick if you are not prepared.
The second thing you want to consider is hiring a professional realtor. Remember that a professional realtor doesn't cost you anything. The Seller pays for both the buyer and the seller’s agent. Your agent doesn't have to be your friend. Sometimes it's best to keep your friend a friend and your business as business. When you're looking for a realtor, find out how long have they been in business, what type of experience they have, to make sure that they can properly represent you and your best interests.
Lastly, make sure that you are pre-qualified. I highly recommend that you use a local lender. Local lenders are much more responsive and can ensure that you're going to close on time. I can always recommend our partner lenders or a few other lenders in the area. If you have any questions about that please feel free to reach out to me. It's really imperative that you get pre-qualified before we go shopping. Nothing is worse than going out shopping and finding the perfect house that you fall in love with, and then finding out you cannot afford it. What happens is every house that you look at after that, you compare to the house that you could not have. It's a disaster! Something you don't want to do, so let's make sure you get pre-qualified, before we start our shopping.