Buying a home is an exciting but often overwhelming experience, particularly if you are buying your first home. As your buying process specialist, we can help you through the home buying process and assure that you find the right home for you, at the right price for you. We suggest beginning the process six months prior to the time you want to be in your new home. Every home buyer has a number of concerns, all of which we can help with:
There are a multitude of variables in the home-buying process, which means the time it takes to find and buy your new home will vary. A typical home search process may take three to four months, including the mortgage approval process, comparing and evaluating properties, making an offer and the closing process. The loan process typically takes 30-45 days.
Perhaps one of the most intimidating aspects of buying a home is the mortgage approval process. We'll be here to help guide you through this, but there are many ways you can prepare early on to make the process move with more ease. Start by making sure your budget is under control--make a list of all your monthly expenses, compare it with your income, and see if adjustments need to be made. You should also try to pay off small credit card balances. Start gathering documents you may need, such as W-2 forms, income tax returns for the past few years, pay stubs, records of child support or alimony, bank statements for the past several months, and your credit report. Also, be sure to allow for closing costs. Getting several offers will allow you to compare loans and get the best deal.
A general guideline to consider is that most buyers purchase a home that costs about one and a half to two and half times their current annual income. For example, someone earning $50,000 a year might purchase a home for $75,000 to $125,000. Mortgage payments should be about 26-28 percent of your gross monthly income. Existing debt is also considered in the mortgage process, and total debt payments (car payments, credit cards, student loans, etc.) should not exceed 40 percent of your gross monthly income.
Before you start looking at properties, make a list of "must-have" features along with optional features you'd like to have. "Must-have" features may include the number of bedrooms and bathrooms you'll need to accommodate your family, location (consider commute to work, which schools your children will attend, etc.), lot size and special needs (handicapped access, etc.). Optional features may include the architectural styling, bay windows, landscaping, etc. Having a clear idea of what you want in a home will help you find the perfect property. Educating yourself about the home-buying process is key to getting a home you love and can afford. As your advisor, we are here to answer any questions you might have and guide you through this process.
1. Become a pre-approved buyer. This step can not be more important. As a pre-approved buyer, you have better leverage when it comes to negotiating with the seller. The pre-approval process is simple and will help show sellers that you are a serious buyer. Also, you will be able to assess any credit issues you may have early rather than finding out at the last minute that you are not able to buy due to a credit issue that could have been cleared up early on. If you find that your credit report is better than you thought, you will have peace of mind knowing this in advance.
2. Beat your competition to the best listings. Staying on top of market trends is vital when you’re looking for a home. Like any other home buyer, you want the best home at the best price possible. Of course, these are the homes that never stick around for too long so you’ll need to make every effort to keep yourself aware of the latest and best listings.
3. Research market trends in your area of interest. Familiarizing yourself with the area that you are interested in will help you get a better idea of what homes are selling for as well as how long they are typically on the market. Be sure to investigate price ranges for the type of home you want.
4. Prove that you are a serious buyer. There are many different ways to prove to the seller that you are sincerely interested in buying their home. One way is by getting pre-approved, which will later give you the edge in an offer situation. An even better way to accomplish this is to put down a larger payment to catch the attention of the seller.
5. Don’t settle too fast. Buying a home might be one of the largest investments of your lifetime. Because of this, your primary goal should be to make sure that you get the best deal possible for the home you are interested in.
6. Keep your offer simple. The purchase contract should be kept simple and without any unnecessary conditions, especially repairs. A seller will be more interested in an offer that is not going to be slowed down or delayed by things that do not severely affect the value of the home.
7. Don’t go it alone. With an ever changing market, today’s home buyers may find it very difficult to go through the buying process on their own. Having an experienced advisor who can keep your best interests in mind, makes a significant impact when buying a home and maximizing your investments.