Looking To Buy A Home? We Can Help!
1. Get your Credit in Order
Make sure you know what is going on with your credit before you try to apply for a loan. If you have some debts, work on paying off some of those debts so you can have a better credit score and ultimately save you a lot of money in the long run on your mortgage. Sometimes there are mistakes on your credit that need to be looked into and may take some time to get removed. The more you know about your credit situation the better place you will be in as a home buyer.
2. Find an Agent
One of the first things you should do when you start your home buying journey is to find a local agent. There are many benefits to having an agent. First and foremost, an agent will work for you on YOUR behalf when you make an offer to purchase a home. The agent that is selling the house is working in the best interest of the Seller, not you. Hiring a HomApt agent will not cost you anything, as Buyers agents are paid by the sellers in a traditional sale of properties listed on the MLS, also HomApt Realty does not charge Buyers “admin fees”, therefore hiring a HomApt agent is free to Buyers.
Additionally, an agent has access to properties as soon as they come onto the market. Many of the big property search websites don’t display new properties or changes for a day or two. An agent can set you up to get new listings the minute they hit the market. And don’t wait for open houses to view homes, the agent you choose can get you into homes for private showings on your schedule. Contact a HomApt Agent today.
3. Get Approved with a Lender
Before you even start your search you need to know what kind of home you can afford. It doesn’t make sense to go to open houses for houses that are out of your price range or comfort zone. If you hire an agent, they usually have a list of great lenders they work with and are known to get buyers from approval to closing with little or no issues. Look into lenders that are Mortgage Brokers. Mortgage Brokers are able to shop around to get you the best rate rather than only shopping rates at one bank.
These days many sellers won’t accept offers that do not also come with an approval letter form a lender. If you go out home shopping without already being pre-approved you could be setting yourself up for disappointment if you find a home that you LOVE. Once you have spoken with a lender they will be able to give a loan summary that breaks down what your payment will be every month.
Sometimes you might be approved to buy higher than you are comfortable with and it’s a good time to look into what you’d like your payments to be and base your home search on those numbers to makes sure you are happy with your home purchase for years to come.
4. Explore Down Payment Options
There are many options out there if the down payment amount is an issue for you.
Conventional Mortgages conform to standards which are set by the government entities Fannie Mae and Freddie Mac. These mortgages can require as little down as 3%.
FHA Loans are mortgages that are insured by the Federal Housing Administration and require as little as 3.5% down.
VA Loans are guaranteed by the Department of Veterans Affairs and can sometimes allow for no down payment at all.
Making a higher down payment will allow for lower monthly payments, but if you want the lowest monthly payment a 30-year mortgage would be for you. If you want a lower rate and can make higher payments each month a 20 or 15-year mortgage would be a great fit and can save you a whole lot of money on the life of the loan.
5. Research Where to Live
There are many reasons people choose where they want to live, the school systems, proximity to work, close to family, trendy area. Whatever your reason is, it’s good to take some time to drive around different neighborhoods to find out what you like and don’t like about each. Once you’ve figured out which areas you love, your agent will be able to send you a more defined list of homes and you will be happy about your choice to move to this area after closing rather than having second thoughts.
6. Communicate with Your Agent
If you have concerns about anything while going through the home buying process always ask questions. Don’t ever think a question is not worth asking, this is one of the biggest purchases you’ll ever make in your life and your agent is on your side to make sure you are an informed and knowledgeable buyer.
7. Make a Competitive Offer
With the state of our real estate market in Minnesota you will likely be involved in a multiple offer situation. When you are in this situation make your best offer, but always make sure it’s something you are comfortable pushing yourself to. Often times buyers get very excited in the moment and make an offer they might not be comfortable with and then have buyers regret after their offer gets accepted. Take a little time to step back and really look at the big picture of yourself and this home before you decide on the offer you want to make. And if you love that home make a solid offer.
8. Get a Home Inspection
Once you’ve found that home you love and you’re ready to make an offer, I always suggest making the offer contingent on a home inspection. Unless you are a licensed contractor yourself there is a lot that you can learn from the inspection. From finding out some big issues to getting familiar with the mechanical systems and how they perform, the home inspection will provide you will a lot of information that isn’t always visible when you’re walking through during your showing.
A great inspector will also be able to point out issues that may not be a problem now but could cause future damage. On the flip side something you think might be a big issue that you have reservations about, the inspector might be able to give you some insight into how it may just be an inexpensive fix that you could take care of yourself and not have to ask the sellers to repair and possibly derail you from buying the home you love. Often times a home inspection will point out minor safety issues that sellers will usually have no problem taking care of, but it’s always good to have that inspection contingency safety net in place.
9. Budget for Future Needs
Once you make it through the search, had your offer accepted, and closed on your home, you might be wondering where the money is going to come to make repairs or update the bathrooms. I always suggest that my buyers start a “rainy day” fund for either unexpected repairs or updates you want to do.
If you put a little money away every month you will have the funds to get that new AC when it goes out in the middle of the summer or when you decide you don’t like the laminate countertop you didn’t mind so much when you bought the house. Having a special fund will make homeownership a lot less stressful when the inevitable breakdown of something occurs.
10. Celebrate and Enjoy Being a Homeowner
Best of luck!