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It's true that you need good credit to buy a home, but you don't need perfect
credit. If you don't have good credit right now, you can start improving
your credit. Poor credit usually means higher interest rate for the loan,
and you can end up paying more in interest.
You can order your credit report from any of the major credit-reporting agencies
below.
Equifax
1-800-685-1111
www.equifax.com |
Experian
1-888-397-3742
www.experian.com |
Trans Union Corporation
1-800-916-8800
www.transunion.com |
If you find any errors or outdated information on your credit report, you should
have the mistakes corrected because it could hurt your chances of getting the
best interest rate you deserve or getting a loan. You can correct the
mistakes by calling the credit-reporting agency or the creditor.
You can save yourself a lot of time if you find out how much mortgage you can
afford. Generally, the more your gross income is, the more you can
borrow. But credit card debts, long term debts, and other monthly
expenses can negatively affect your lender's decision. Please consult a
loan representative to find out how much you can borrow. It is also a
good idea to get yourself pre-qualified and pre-approved by a lender
before shopping for a home.
Focus on the features you want in a home: condo or single family house, numbers
of bedroom and bathroom, garage and number of parking space, pool, and other
features. Knowing what you are looking for will help you focus your
search and it will also help your real estate broker to better find properties
that meet your requirements.
After knowing what features you want in a home, the next step is to find
out the price range you can afford. There are two ways to go
about this - prequalification or preapproval for a mortgage. You
will need to contact a mortgage company for either process. There are key
differences between the two processes.
Prequalification process takes into account very basic information
regarding your financial status and gives you an amount for which you may
qualify. The prequalified amount is based solely on the
information you provide. Information given to this process is
not throughly investigated and therefore may be unreliable.
Preapproval is a much more involved process. The lender will take
all relevant financial information from you and perform an
extensive check on your current financial status. The result of this is
the exact amount that you will be eligible for depending on what type of loan
you decide to go with. Being preapproved means to seller that you have
gone through extensive financial background check by your lender, and the most
important is that you can afford up to the preapproved amount on your home
purchase.
Home buying is not just about buying a house. The neighborhood is
just as important. Things to consider include: time for the commute,
local amenities, school district, demographic information, crime rate,
etc. This web site provides links to the useful resources to help you
find specific information about a neighborhood.
Now you really begin house-hunting. Your agent can find listings
for you, based on your requirements. You can also use this web site to
search for listings that you are interested in, and schedule
showings for the properties you chose.
After finding the house you would like to purchase, the next step is to make an
offer. In most cases, an offer should be based on the recent sales of
homes in that neighborhood which are similar in size, quality, features,
conveniences, and amenities. Your agent can assist you on how
to create an offer that will have the best chance of being accepted by the
seller.
An offer includes many things other than just the offering price. Down
payment, financing arrangements, amount of deposit, settlement date,
contingencies as well as other terms and conditions, play an important role in
the seller's decision making. The legalities of how the terms and
conditions in the offer are phrased are also very important. A properly
and carefully written offer can avoid ambiguities and argument, and make
the home buying process smoother.
After making your offer, you and your agent will enter the negotiation
process to reach an agreement with the seller. In the home buying
process, almost everything is negotiable. With the market knowledge,
negotiating expertise and the understanding of the seller's needs through
communicating with the seller's agent, your agent is in a position to
help you get your offer accepted at the best price and terms possible for
you. The key to successful negotiating is creating a Win-Win situation
for the buyer and the seller.
It is a good idea to make home inspection a contingency in your
offer. It gives you an indepth knowledge of the condition of
the property you are buying and it can keep you from buying a house
that will cost you far more in repairs. If there is anything mentioned in
the inspection report that you do not like, you may want to negotiate with the
seller to have those problems repaired or ask for a lower price.
Your
lender will require you to get an appraisal of the property you want to
buy, to make sure it is worth the money that you are borrowing.
It is also a good idea to include the appraisal as a
contingency in your offer.
Lenders require that you have homeowners insurance, to protect both your
interests and theirs.
This is the final step of your home buying process. You are the new owner
of the property you purchased. However, my service does not end
here. If you have any need for real estate related service such as
house cleaning, carpet cleaning and installation, landscaping, repairs,
painting, etc., please contact me.
After purchasing your new home, you will receive supplemental
property tax bills from
the county's assessor. Supplemental property tax is prorated property tax for the difference
in assessed value before and after the change of ownership.
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