Home Buyer - A Dozen things to do.
By: Robert A. Hulme - Realtor - Loan Officer -Utah County, Including Provo, Orem, Pleasant Grove, American Fork, Lehi, Highland, Alpine and Cedar Hills, Eagle Mountain, Payson, Saratoga Springs, Spanish Fork, Springville, Mortgage Xpress, Agent
The largest personal finance transaction a person makes in his/her life is purchasing a Home. It is crucial that you make the right preparations and do the proper research. Regardless of the unique situations and special circumstances, there are a dozen things that you should do.
Understand the Home Buying process
Study the home buying process, this will allow you to make better decisions and act confidently. The home buying vocabulary is an important part of this; make sure you understand all the terminology that is used.
Obtain your Credit Report
Get a copy of your credit report and review it for errors. Mortgage lenders will be reviewing your credit very closely; you should do the same, before they do.
Fix Credit Errors
It is important that you find any errors that you have on your credit report and have them fixed prior to submitting your information to a loan officer. It could take some time to have these errors fixed so should not waste any time on this step.
Lenders prefer to see your Debt-to-Income ratio at or below 20% of net monthly income. If your ratio is above 20%, it would be a good idea to pay it down before applying for a loan.
Start Saving Cash
Not only is cash important when making your down payment, lenders like to see some cash reserves on hand. You may need some extra cash to cover unexpected fees that might arise before closing.
During the pre-approval process the lender will review your credit, finances and debt and will conditionally qualify you a certain amount of mortgage loan. Sellers take buyers with a pre-approval letter a lot more serious; you are in a much better bargaining position.
Avoid New Lines of Credit
Try keeping your financial situation as stable and as favorable as possible. The worst thing you can do is take out a new loan or line of credit while in the loan process.
Choose A Realtor
It is very important that you have a professional to help you through the purchase process, especially when you are buying a home. The agent representing the Seller always has the best interest of his Seller in mind. Buyer Representation is very important to get an objective view and have someone who will work hard for you.
Validate the Asking Price
It is called the "asking price" for good reason. No asking price is set in stone, and everything in real estate is negotiable. So don't accept an asking price as being reasonable until you validate it through careful research. Your Realtor can provide you with a Comparable Market Analysis to help you with this step.
Write an Offer
After careful evaluation, and checking out all the comparisons available to you, now is the time to make an offer on the home.
Get a Home Inspection
This is a very crucial step. It is so important to you to use the time allotted for the home evaluation to get a complete Home Inspection. A home is a sizable investment, and the last thing you want is t find a bunch of things wrong with it after you take ownership. Inspections are very affordable, and you can't put a price on the peace of mind you will have as a result of your inspection.