Two of the biggest real estate transactions most people will undertake in their lifetime is buying and selling a home. Both buying and selling a home are big financial and legal commitments that should not be taken lightly.
Let’s start with buying a home. Whether you are a first time buyer or a seasoned buyer, working with professionals you can trust will make your transaction go as smoothly as possible.
Search the Internet and you will find lots of “10 steps to Buying a House” type articles. These are a good starting points but they often lack the detail needed to help you understand exactly what you need to know. This is where the use of professionals in the real estate community is the best place to start.
First things First
When you start thinking about calling a real estate professional to begin your journey of buying a home, don’t limit you calls to local real estate agents. Your mortgage lender is also a real estate professional who needs to be involved very early in your process. Working with your mortgage lender before you begin looking for a home will give you a head start.
Schedule an appointment to meet with your mortgage lender and speak to him or her about your options for buying a home. Your mortgage lender will ask a lot of questions to allow him or her to understand your current finances, the amount of down payment you have available, the type of home you are hoping to buy and what your long term financial plans are.
Do you want to pay off your home as quickly as possible, do you plan to be in your home only a few years before relocating, do you want the lowest payment possible or the shortest term possible? The answers to these questions help your mortgage lender make the best recommendations for your loan options.
Some properties have different qualification criteria than other properties, some loan products have income limitations and some have higher required down payments. Your mortgage lender should explain to you the requirements for different types of properties if you have not already decided on a property type as well as any loan program specific requirements.
When you start the loan qualification process, you should think of the qualification as two separate approvals. Your mortgage lender will initially qualify you; as the borrower based on your finances and credit worthiness. The second part of the qualification process is the qualification of the property you wish to buy.
The Borrower Pre-Qualification Process
Your mortgage lender will evaluate your credit history and your current monthly debts to determine the maximum mortgage loan amount you could qualify for. Based on the loan amount you qualify for and your available down payment, your mortgage lender will tell you the maximum purchase price of a home you can qualify for. With this knowledge, you can know share with your realtor the range of purchase prices you would like to look at for the size and type of home you are wanting to buy.
Calling a Realtor
Now that you have your prequalification taken care of, the fun can begin. It is time to start looking at homes. After you choose a realtor to represent you in your transaction, make an appointment to sit and talk with them. Share with you realtor what you are looking for in a home, your ideal location and any other specific criteria you have. This information helps the realtor provide you with a focused list of homes meeting your criteria.
Your realtor has access to databases of homes listed for sale in one central location. Allowing your realtor to search for homes is faster and easier than you looking though newspapers and multiple websites and spending hours or more of your time sifting through thousands of listings. Realtors are experienced in searching for the right property and can help you avoid spending time looking at houses that don’t meet your needs. Your realtor will be a valuable agent working on your behalf through the whole process.
In our next column: You found the perfect home, what’s next?
Sarah Hosford-Campbell is a mortgage loan office with SecurityNational Mortgage. Feel free to contact her to suggest home ownership topics or for assistance with your home financing needs. She can be reached at email@example.com.