Take Control of Your Homebuying Experience 🏡

Are you in the market to purchase a home? The process, even if it goes as smoothly as possible, can be very stressful.

With 18 years of experience in mortgage lending, I can tell you that there are definite steps you can take to better control the process which will help minimize the stress associated with buying a home. Whether you have purchased a home before or are a first-time homebuyer, below are some tips to guide you through the process.

First- talk to a trusted mortgage broker/lender. Complete a loan application and get pre-qualified to determine not only the loan amount you qualify for but how much you can actually afford.

Note: There is a distinct difference in how much you get approved for and how much you can afford. You don’t want to be broke every month because your house payment is so high. Don’t forget other payments such as utilities that aren’t factored into the housing payment.

Fact: You do not need to put 20% down in order to buy a home. There are many programs available with low or no down payment options. Yes, in most cases you will have mortgage insurance included in your payment initially, but as you build equity, there are ways to have that removed. A mortgage expert can discuss this with you.

Don’t let the area you live in price you out of the market because you continue to put off purchasing a home. Get in to a condo, townhome or house as soon as you’re able so you can begin to experience the benefits of homeownership.

Now that you know how much house you can afford, you and the real estate agent you have selected can begin to shop for homes.

What factors should influence your decision?

• How much house do you need? Two, three or four bedroom? Will the size meet you and your family’s needs?
• What neighborhood would you like to live in?
• Is the home located in a quality school district? Even if you don’t plan to have children or they are grown, good school districts can impact the resell of your home down the road.
• What style of home appeals to you? Ranch, Two-Story (consider the problem with stairs for aging parents who visit or for when you get older). Talk to your real estate professional about the resell value of the different styles of homes available.
• How much maintenance will the home require and what might those costs be? Depending on the age of the home and appliances, for example, you might find yourself replacing large ticket items such as a water heater, furnace or fridge.
• What about lot size? Is it so large that you will spend every Saturday working on the lawn? Maybe that’s your thing and you will love it or maybe you would rather relax out back instead. How much water will it take and what will that monthly expense be to water the lawn?
• Finally, talk to your agent about anything negative about a property that you’re interested in that could affect the resell? Is it located on a busy street with heavy traffic, is the lot too big or too small, do neighbors maintain the exterior of their properties – if it’s not located in a neighborhood with a homeowner’s association that ensures properties are maintained.

If you have ever watched the “Buying {insert respective geographic location} shows, the individual or couple provide the agent with a wish list- great idea- and a budget- even better idea! Especially since you’ve consulted with your mortgage expert and you know much you can afford.

BUT, inevitably in these shows, the agent takes them into properties that exceed their desired budget, they immediately come across as overly concerned- maybe the shows tells them to act dramatic. We finally get to the end of the show, they pick a property beyond their budget and put in an offer that falls within their budget. Their offer gets accepted and everyone is happy… well everyone except maybe the seller.

So this brings up a great point, you might be able to shop in a slightly higher price range, but make an offer that falls comfortably in your range. This is where your real estate agent’s expertise is priceless. Can you lowball the offer price? These are the factors that will come into play that will answer your question:

• Is this a buyer’s or a seller’s market?
• How long has this listing been active?
• How does the listed price compare to similar homes in the area?
• How badly do you want that specific home?

You find a home that is perfect for you, so you put in an offer and the seller accepts! This is very exciting and nerve-wrecking! As I stated earlier, even if the process goes as smoothly as possibly, it will still feel stressful. I believe that is because you will grow emotionally attached to the idea of owning that home. You lie awake at night, thinking about where you will place certain pieces of furniture or the family events you can host.

Just relax and be sure to get your mortgage expert the items they request in a timely manner…and before you know it… the keys to your new home will be handed to you. If you’re being asked to provide something that you don’t understand… just ask. Your mortgage and real estate professionals are on your side and ready to assist you.

What about the home that you walk into and can envision hosting family gatherings, it’s located in the perfect neighborhood, and it’s even in your price range? Let’s say that it’s an older home, but has seemingly been updated throughout… gorgeous updates! Then you walk into the master bathroom. Oops, its seems as though this one got skipped in the renovations. Your heart sinks, the home was perfect until you entered the gross, outdated bathroom… and now you can no longer envision living here.

Don’t get discouraged! There are mortgage loan programs that will allow you to finance desired improvements and updates at the time of purchase. Make sure your mortgage expert offers renovation loans. Fannie Mae Homestyle, FHA 203k and VA renovation loan programs are available! You can get into the home of your dreams, finance the renovation costs into your loan and have that completed in just a few short months! Crisis averted! Phew.

Many investors who will review your credit worthiness and ability to repay the mortgage allow your file to be submitted as a “To Be Determined” property- meaning you haven’t actually found the home of your dreams yet and are still shopping.

By submitting your income information, your file will actually be reviewed and approved by an underwriter. This could improve your “buying power” when you decide to put in an offer since you’ve already received an actual conditional lender approval.

Getting started with your mortgage expert is easy! Be sure to gather the following information and documentation so you are prepared to accurately complete the application:

• SSN for all applicants
• Residential history for two years
• Employment history for two years
• W2s
• Two years of tax returns
• 30-days of paystubs with YTD income
• 60-days of bank statements
• Other asset accounts, if required for qualifying
• Source of down payment
• Name and number of Homeowner’s Insurance Agent

Tips:

• Make sure you work with a mortgage expert that has access to a vast number of loan programs so they can find the right one for you!
• VA loans do not require any down payment or mortgage insurance. Thank you for your service to our great country! 🇺🇸🇺🇸🇺🇸
• With certain programs, your down payment can be gifted.
• If using funds deposited to your asset account, they have to be seasoned for 60 days or the deposit will have to be source/explained.
• You’re making what is likely the largest financial commitment of your life, I would consider talking to a financial advisor about life insurance and other solutions to protect your family and home.
• Don’t make major purchases during the application process as that can negatively impact your approval.
• Don’t make significant deposits to your accounts or withdraw money from your accounts without first talking to your mortgage professional.
• Some expenses associated with buying/owning a home might be tax deductible. Consult with a tax professional to learn more.

Have any questions about loan programs or the home buying process? Comment below and I’d be happy to answer them.

Happy House Hunting!

#Homeownership #Mortgages #RealEstate #AmericanDream