One excellent way to improve your financial profile is to
buy a home of your own. But we won’t lie: It’s a long and potentially
incredibly stressful process, especially when it comes to the dollars and cents
of securing a mortgage loan.
So how do you navigate the stress of the journey in order to
reach Destination Homeowner? There’s a lot that’s within your control to help
ease some of that stress and make the whole thing a little bit easier. If you
take a few steps upfront to manage the financial details early, you’ll thank
yourself on moving day.
Get pre-approved for a mortgage
Getting your mortgage loan is arguably the most
labor-intensive aspect of buying a home. You’ll have to submit documents that
A mortgage pre-approval is much more involved than its
lighter cousin, the mortgage pre-qualification.
A pre-approval will help you understand exactly how your new home will fit into
your finances and whether you can even afford the house you’re currently
touring. Some buyers make the mistake of getting pre-qualified for a mortgage,
making an offer on a house they love – and then discovering once they submit
all their paperwork that they can’t actually get a loan for that amount.
Pick the best mortgage for your situation
All mortgages will help you buy a home, but not all
mortgages are created equal when it comes to your own personal financial
know you’re only going to be in your current city for two or three more
years before pursuing a career change elsewhere, for example, then maybe a
30-year fixed-rate mortgage is the wrong choice for you.
could build more equity in a shorter period of time with a 15-year
mortgage, and an adjustable-rate mortgage might give you a more
competitive rate for the time you’ll be in the home.
if you are planning on digging in and staying for a while, then a 30-year
fixed-rate mortgage might be exactly what you need.
Save as much as you can
Even if you’re securing a low-down-payment or
no-down-payment mortgage, you should still expect some out-of-pocket costs that
you’ll have to shoulder before you can start paying a mortgage instead of rent.
Depending on the sales contract, buyers will likely have to pay for the
appraiser and the inspector to look at the house and (respectively) appraise
and inspect it. A seller might request earnest money in order to accept an
offer, so buyers will have to provide that.
repairs to the house might be taken on by the buyer in order to expedite
the sale, so that’s another possible expense to consider.
are closing costs that need to be paid to the title company upon closing,
and if a buyer wants to purchase title insurance to protect the sale,
that’s an additional expense, too.
don’t forget about the cost of moving – you’ll need time off work and a
truck at minimum, or to hire your own movers. Then once you move in, you
might need to pick up some new furniture or other items for your new
before you bid
If you’ve found a home that could be yours and you’re ready
to make a bid, stop and think before you decide on a number.
Offering the seller’s asking price may seem a perfectly safe
move to make (and it might be), but how will you feel when you learn that most
sellers in the area are negotiating down from their listing price? (Here’s how
you’ll feel: Like you left several thousand perfectly good dollars on the table
that could have been yours).
Offering less than asking price could also be considered a
safe move in some markets, but in others, you might have priced yourself out of
consideration from the opening bid.
As your real estate agent, I can explain the local market
trends and help you come up with a bid that works with your budget and will be
seen as serious and competitive by the seller. I can show you whether
houses in the area have been selling for below or above the asking price and help you find that sweet spot where both you and the seller are happy with